GOOD THIRD QUARTER FOR NETENT

9 November 2007

Sales, after tax profits up as Swedes forge ahead


Sweden and Malta based online gambling software developer Net Entertainment released positive third quarter figures this week showing a net increase in sales of 36 percent, after tax profits up 73 percent and five new Casino Module licensees.

Net sales reached SEK 32.4 million, up on the SEK 23.8 million achieved in the same period last year, and after tax returns hit SEK 9.76 (2006 Q3: SEK 5.64 million) Net profit margin was also up at 33.5 percent (last time 26.6 percent)

The results continue to build towards a positive year for the turnkey provider, which in the first three quarters has delivered a net sales increase of 39 percent to SEK 95.7 million (2006: 68.8 million) and after tax profit growth of 75 percent to SEK 32.1 million (2006: SEK18.3 million)

Net Entertainment CEO Johan Öhman reports that the online gaming market continues to show good growth. "During the third quarter, our sales increased nine percent compared to the previous [Q2] quarter," he said. "The growth is driven by a strong product that is well received by the end user, combined with favourable external factors such as a relatively early autumn, which has positively affected gaming activity.

So far this year, 13 new licensing agreements have been signed, including five during the third quarter. Ohman attributes this to continual investments in product development and regular product releases.

"The market for online gaming is constantly changing, which is accentuated by the rise of new market and player segments that will contribute to the industry's continued growth," Ohman added. "Net Entertainment's active, continuous product development ensures that our products meet changes in demand. This will not only further increase our competitive strength and the profitability of our licensees, but also increase demand for Net Entertainment's products."

Net Entertainment was established in 1996 and has a customer base of about 50 international gaming companies. Revenues consist of royalties based on the revenues generated by the company's products and other sales revenues. Net Entertainment is a pure development company and therefore does not operate any gaming sites of its own.

The Group, which has been listed on the Nordic Growth Market Equity since April 5, 2007 has its head office in Stockholm where all technical development is undertaken, and an office in Malta where all commercial operations including sales, marketing and product management is conducted.

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