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PartyGaming reports half-year net loss, but profit from continuing operations

PartyGaming reports half-year net loss, but profit from continuing operations

PartyGaming PLC reported a half-year net loss on Wednesday, but also posted a small rise in profit from continuing operations as its efforts to find revenues outside of the United States paid off.
PartyGaming, which runs what was once the world's biggest poker site, PartyPoker, said it had a net loss of US$50.6 million (euro37.03 million) in the six months to June 30, compared with a US$298.1 million profit for the same period a year ago when the company was operating in the United States.
Revenue was more than four times lower at US$212.5 million (euro155.5 million).
The company has scrambled to tap other markets since the United States effectively banned online gambling last autumn when Congress passed a bill making it illegal for banks and credit card companies to settle payments to online gambling sites. U.S. President George W. Bush signed the bill into law in October.
That eliminated nearly 80 percent of PartyGaming's revenue and its stock has dropped fourfold since then.
Crucially, the company reported that underlying profit _ the figure that is closely watched by analysts and comprises earnings before interest, taxes, depreciation and amortization, from continuing operations _ rose to US$36.9 million (euro27.01 million) from US$28.5 million. Analysts had pegged this year's figure at closer to US$31 million (euro22.69 million).
Revenue from continuing operations rose 42 percent.
The company now has burgeoning poker and casino operations, and Chief Executive Mitch Garber flagged that business alliances were on the drawing board after its acquisition of some businesses and assets from smaller rivals Empire Online Ltd. and Intercontinental Online Gaming Ltd. in December.
"We continue to execute our strategy through growing our player base, localization of the customer offer and broadening our product suite," he said. "Over the coming weeks and months we expect to announce a number of further important business alliances with leading companies around the world that will help us to promote and grow our business."
PartyGaming has held talks with rivals 888 Holdings PLC, BWIN Interactive Entertainment AG and Gamesys Group about possible tie-ups but nothing has come to fruition.
The European online gambling market remains the company's primary focus but Garber said that it will open an office in Asia next week and send over a senior executive to explore opportunities. He declined to specify where the office will be opened.
The company's shares jumped 9.9 percent to 25 pence (50.3 U.S. cents; 36.9 euro cents) after the earnings update for the half-year _ it does not provide quarterly earnings.
Numis analyst Richard Carter said the results "should help reassure investors," adding that "the risk-reward pendulum now clearly points to the upside." Numis has a 42 pence (84.4 U.S. cents: 62 euro cents) target price for PartyGaming shares.


Updated : 2021-05-18 01:33 GMT+08:00