BWIN SHARES TAKE A HIT ON THIRD QUARTER NUMBERS

23 November 2007

Profit and players up, but investors didn't like the net loss number


Vienna-listed online gambling group Bwin turned in its third quarter results last week, showing a core profit and resurgent growth in players, but the stock dropped 15 percent on a net loss number that possibly worried investors, reports Reuters.

Trading in the stock went as low as Euro 22.12 making it one of the top losers on Austria's ATX index.

EBITDA came in at Euro 15.2 million ($22.3 million) in the quarter after stripping off Euro 6 million in share-based staff compensation, echoing a Euro 5.2 million loss a year ago.

The company recorded a net loss of Euro 5.1 million in the quarter, less than in the previous year's quarter but leaving it with a loss after nine months that could make the achievement of year end market expectations difficult.

According to Reuters, the average estimate for Bwin's full-year net profit is Euro 14.9 million, so the company would have to post net profit of Euro 15.7 million in the fourth quarter to reach this.

Bwin's g ross gaming revenues were up 20 percent at Euro 86.2 million after discontinued operations in the United States and Turkey were taken out of the stats. Sports betting revenues rose 15 percent and brought in a betting margin of 8.5 percent.

The company's player base expanded by 9 percent during the third quarter, a particularly welcome development after two quarters of declining customer numbers due to a previous cut in marketing spending. Marketing costs rose 14 percent on the previous quarter to achieve this

Bwin shares had risen by 60 percent this year before Thursday's drop. In November alone, they had gained as much as 21 percent on the back of favourable court decisions in Germany.

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