bwin reports higher H1 revenues despite 2006 World Cup, halt in Turkey

bwin Interactive Entertainment AG announced results for the first half of 2007 showing gross gaming revenues of EUR 165.1 mln (H1 2006: EUR 144.9 mln excluding US operations), with 1.1 mln active and 378,000 new active real-money customers and a result after tax of EUR 4.3 mln.
Vienna-based bwin increased gross gaming revenues (excl. US operations) to EUR 165.1 mln for H1 2007, up 13.9% over H1 2006, which was dominated by the Soccer World Championships in Germany. This result was achieved despite the suspension of the company’s range of online gaming products in Turkey at the beginning of March 2007 and a below-average sports betting margin in Q2 2007.

Gross gaming revenue from sports betting rose by 8.3% compared to H1 2006, to EUR 87.5 mln, with a sports betting margin of 8.4% in H1 2007. Gross gaming revenues generated from the poker, casino and games sectors amounted to EUR 40 mln (H1 2006: 28.9 mln, excl. US operations), EUR 30.7 mln (H1 2006: 28.8 mln excl. US operations) and EUR 6.8 mln (H1 2006: 6.5 mln excl. US operations) respectively.

The development of active and new active real-money customers in H1 2007 was significantly affected by the suspension of the company’s range of online gaming products in Turkey at the beginning of March 2007, and a marked reduction in the marketing budget. The latter had a particular impact on the growth of new customers.

The marketing mix is only expected to be optimized during the coming year, due to the inertia effects in sports sponsoring. By comparison with H1 2006 when the Soccer World Championships took place, in H1 2007 the number of active customers declined by 12.8 per cent, from 1,253,000 (excl. US operations) to 1,093,000. Of these, a total of 378,000 customers were active for the first time in H1 2007 (H1 2006: 717,000 excl. US operations).
As a result of the strategic reorientation already announced, operating expenses of EUR 135.7 mln in H1 2007 were down in comparison to H1 2006 (EUR 176.1 mln), making a significant contribution to the improved results.

Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to EUR 30 mln compared to H1 2006 (EUR -3.8 mln). Operating income (EBIT) rose from a negative EUR 30.2 mln in H1 2006 to EUR 7.4 mln in H1 2007. A profit after tax and third-party interests of EUR 4.3 mln was reported for H1 2007, in contrast to a loss of EUR 27.1 mln for the comparable period the previous year.