Operating Profit Surges for Svenska Spel Despite Revenue Drop in Q2 2024
In the second quarter of 2024, Svenska Spel reported net gaming revenue (NGR) of SEK1.87 billion, marking a 5% decline compared to the same period in the previous year. The primary factors contributing to this decrease were reduced revenue in the Casino Cosmopol business area and the implementation of stricter responsible gambling measures.
Casino Cosmopol’s Impact
The Casino Cosmopol segment experienced significant challenges, with NGR plummeting by 72% to SEK35 million. This steep decline was primarily due to the closure of casinos in Gothenburg and Malmö in February, leaving only the Stockholm casino operational during the quarter.
The strengthened responsible gambling measures further impacted revenue across all business areas.
Operating Profit and Margin Improvement
Despite the revenue dip, Svenska Spel saw a notable 17% increase in operating profit, reaching SEK640 million.
This improvement was driven by cost reductions resulting from restructuring initiatives undertaken between October 2023 and March 2024. Consequently, the operating margin significantly improved, rising from 18% to 34%.
Online Gambling
Online gambling remained a strong performer for Svenska Spel, with NGR surpassing SEK1.1 billion in Q2 2024, reflecting an 8% year-on-year increase.
Online revenue accounted for 59% of the group’s total revenue during the quarter, up from 52% in the same period last year.
Sport & Casino
The Sport & Casino business area reported a slight 2% decrease in NGR to SEK504 million. Although the European Football Championship in June provided a boost, it was insufficient to offset the overall impact of stricter gambling regulations.
Tur Business Area
The Tur business area showed resilience, with NGR increasing by 3% year-on-year to SEK1.2 billion. This segment’s performance helped balance the overall revenue decline in other areas.
Vegas Business Area
The Vegas business area faced challenges, with NGR declining by 24% year-on-year to SEK94 million. This decline was attributed to economic difficulties faced by business partners and the effects of regulatory measures.
First Half Performance
For the first half of 2024, Svenska Spel’s NGR totaled SEK3.8 billion, representing a 3% decline from the same period in 2023.
Anna Johnson, Svenska Spel’s new president and CEO, highlighted the positive outcomes of the recent restructuring efforts. She noted that the reorganization, which took effect on April 1, led to lower costs and a strengthened operating margin in Q2 2024. Johnson emphasized the opportunities for Svenska Spel to invest in transformative initiatives, enhance responsible gambling measures, and pursue growth-oriented investments.
Johnson also pointed out a positive trend in revenue from players with a lower risk of harmful gambling behavior. The company plans to provide a detailed report on this “healthy” revenue share by the end of August, which was initially expected to be included in the Q2 2024 report.
