Global Gaming´s revenues came in at SEK 72m (estimated SEK 62m), which was 17% above our estimates. The revenue grew by 24% Q/Q, which was likely boosted by the Corona Crisis. The primary market is Finland, where we have seen lockdowns of several vital areas. The company also launched the new brand Boostcasino.com, which seems to have a clear positive impact on the revenues as NinjaCasino´s share of the group’s revenues has dropped from 87% in Q1 to 82% in Q2. The NinjaCasino brand grew with 17% Q/Q in the second quarter.
The strong revenue also seems to continue as the daily average revenue for July came in 12% above the daily average revenue for the first six months in 2020. The numbers indicate growth of a couple of percent compared to the second quarter, which is strong as we expected the boost due to the Corona Crisis to fade out. We still expect that the Corona boost will fade out during but that it will come gradually. At the same time, Global Gaming is ready to take on opportunities with new markets and a sportsbook offering, which should support growth during H2 2020.
On the cost side, the affiliate cost came in well above our estimates, but the Gross Profit was still 15% above our estimates. The marketing expenses were in line with our expectations while the personnel expenses came in well above due to larger restructuring expenses than expected. Other expenses came in well below our estimates, while significant exchange losses had a negative impact. Adjusted for the restructuring expenses and exchange losses, the company made an operating profit of SEK 7m.
The Corona Crisis boosted the second quarter. Nonetheless, Global Gaming has, during the last couple of quarters, made significant operational improvements, which has started to make an impact on the PnL. This is seen in new brands, lower expenses, and a business ready for expansion, both geographically and vertically.
No new information about the legal process regarding the revoked Swedish license was revealed in the quarterly report. However, a regained license is still the most significant trigger for Global Gaming and a game-changer for not only Global Gaming but the gambling industry as a whole in Sweden as well. Nonetheless, we still believe that the chance for a positive outcome is limited. The company has a better chance to lease out the right to the Ninja Casino brand to an external company.
As mentioned in our last note, the new large owner, Enlabs, will have much impact on the share performance as well as the operations going forward. This is also seen in the new proposal of board members, where the Chairman of Enlabs is proposed to be the Chairman of Global Gaming as well. We believe that it is likely that Enlabs will try to obtain the remaining 70% of the shares. However, if that would not be possible at a reasonable price, the company will likely try to set up some a lease agreement for the right to operate the Ninja Casino brand in Sweden.
All in all, Global Gaming´s second quarter was significantly better than expected, and the actions that the company has taken during the last year have started to have a positive impact on the operations. We expect that the company´s expansion and a possible relaunch of the Ninja Casino brand in Sweden, together with the new large owner, will have a significant impact on Global Gaming going forward. The recent increase in sales and earnings multiple for online gambling companies are also boosting the company´s valuation.
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