Nordic online gambling company Kindred Group says it enjoyed a year-on-year revenue rise in the second quarter of this year despite COVID-19-related mass suspension of sports events.
On Wednesday, the Stockholm-listed Kindred Group reported that it estimates its earnings for the 3 months ending June 30 to be about £235 million, up from £226.2 million in Q2. 2019. Kindred will release its official interim report for Q2. 2020 on July 24.
Active customer ranks dropped 11% year-on-year to 1.3 million in the second quarter as sports betting opportunities dried up to the novel coronavirus pandemic that forced leading sports events to be suspended.
However, Kindred says “solid growth” from its other gambling content, including virtual sports and eSports, along with the gradual resumption of leading leagues during the latter stages of Q2, has “partially compensated” for the sports stoppage.
Kindred’s release made no mention of its casino and poker performance, likely because of the current media/regulatory focus on whether players deprived of sports betting were moving their affections to more risky gaming genres such as online slots.
Kindred expects its earnings for the quarter in question to rise to a range of £48m-£53m from the £30.5m it collected in Q2 last year. The gains were credited partly to the “cost reduction actions” the business took as the COVID-19 crisis took hold, including a major payroll purge. The firm reiterated that it plans to continue implementing “operational efficiency initiatives” through year’s end.
Revenue got an additional boost from reductions in Kindred’s marketing, content and other direct costs, though the firm warned that whereas it was thoroughly enjoying the short-term gains, constant reductions in efforts to pimp its products “could damage the long-term competitive position of the business.”
The lack of major sports events was not entirely an issue, as it reduced the betting duties Kindred owed local authorities, with France in particular having the strongest impact in this area because of the market’s high tax rates.
Kindred’s shares closed Wednesday’s trading up over 4% to SEK60.52, after concisely flirting with SEK65 earlier in the day.
The shares started the year at SEK58.5 but dropped to about SEK23 by mid-March as coronavirus took hold.