No one would expect profit drenched financial results from any company in the first half of 2009. Losses are expected in a global turndown and the question of how well a company is run no longer focuses on profits, but instead looks at how well a company mitigates its losses and whether it even manages to stay in business at all!
PartyGaming have this morning released their interim results for the six months of 2009 leading up to 30th June. Net revenue is down from $254.8 million in the first half of 2008 to $201.3 million during the same period for 2009. The net revenues for each arm of PartyGaming show where the losses specifically occurred; with PartyPoker taking the biggest hit and $51.3 million dividing last years net revenues of $153.9 million and this years of $102.6 million. PartyBingo is down this year by $0.8 million, Sports Betting is down by $1.2 million and PartyCasino is down by a barely noticable $0.2 million.
PartyGaming’s Chief Executive Officer, Jim Ryan, has put the reduction in net revenue down to “currency movements, competetive pressures and the impact of the macroeconomic downturn”. In his comments this morning, he obviously focused on the relative stability of PartyCasino, stating that;
“With second quarter average daily revenue up 17% on the previous quarter, casino has been our star performer and continues to go from strength-to-strength, consolidating our position as the world’s leading online casino. During the period, over 60 new games were added in addition to the launch of our dedicated casino affiliate and marketing programmes, all of which were contributors to the strong performance of casino”.
Of the “un-sweepable-under-the-carpet” PartyPoker results, he obviously tries to focus on the positives, rather than get stuck in the negative quagmire of being a third down on figures from this time last year. He comments on the new Italian poker network, the improvements to the customer loyalty and retention schemes and the fact that during the second quarter this year, poker revenues have begun to stabilise.
Additionally, Ryan is right to point out a few other initiatives, which have not yet had a chance to impact on the bottom line and have been in the long-term interest of the company;
- In April of this year PartyGaming entered into a “Non-Prosecution Agreement” with the US Attorney’s Office for the Southern District of New York, whereby, for a “fee” of $105 million (payable in semi-annual instalments up until September 2012), the USAO would not prosecute PartyGaming or any of its subsidiary companies for online gaming services provided to US residents prior to the enactment of UIGEA on 13th September 2006. This agreement is the sign of mature, “anti-ostrich” (head in the sand) planning from the directors of PartyGaming, showing its desire to be taken seriously by the US Authorities, and furthering the “good name” of online gaming, by taking responsibility for it’s actions and taking US laws seriously.
- This year PartyGaming has made several enormous investments to secure and further its reach and reputation as a global leader in its field. The exclusive agreement with Channel 5, the acquisition of Cashcade Ltd. and the agreement to buy the World Poker Tour are all long-term manouvres which will either take a while to come to any financial fruition or were deals that were finalised after the first half of the financial year (ie; the interim report) came about.
Ryan also says that the the clean EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) results are encouraging - $60.0 million this year versus last years $60.9 million - and are greatly a result of the implementation of a cost reduction programme put in place in 2008 and currency movements beneficial to PartyGaming’s cost base.
All in all, it would be fair to say that PartyGaming have been hit in the pocket so far this year, but are positively and proactively looking towards the future. So far this year they have put in place several costly building blocks in order that at the end of the Global Economic Crisis they will be streets ahead of other online gaming businesses. In essence, they are embodying the idea that investment today means not forcing a rebuild tomorrow.
To read a detailed report with the PartyGaming Interim results 2009 click here .
Source; online pokies club the top online site for up-to-date news.
Tags: partygaming
This entry was written by Nena on Saturday, August 29th, 2009 at 12:20 am and is filed under News.
