Home Finance Danske Spil’s profits rise in Q1 due to a flurry of sales

Danske Spil’s profits rise in Q1 due to a flurry of sales

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In Q1, the company’s digital and gaming operations were weaker than expected, but its lottery revenue helped offset this.

Group revenue at Danske Spil during the three months to 31 March hit DKK1.24bn (PS140.5m/EUR166.2m/$178.3m), a 2.2% increase from DKK1.22bn in Q1 of last year.

Danske Lotteri Spil contributed most of the revenue. It grew 4.9% on an annual basis to DKK711m.

Danske Spil stated that the high jackpots of Eurojackpot were a factor in this. This was due to changes, such as more draws and larger jackpots.

Digital and retail struggle for Danske Spil

Danske Licens Spil (which includes online gambling and sports betting) saw its revenue fall 1.0%, to DKK393, compared with other business units.

Danske Spil reported that the growth of customers has helped to grow revenues for casinos, but this is offset by declines in sports betting.

The vertical is being held back by fierce competition, low margins and a retail market that has been in decline ever since 2021, when mandatory ID cards for players were introduced.

Danske Spil reported DKK1m of revenue generated by Swush’s fantasy sports platform. This was down 50% year-on-year. The group sold its 60% stake in Swush in Q1 to Danish tabloid Ekstra Bladet. The sale of Swush generated additional income in the first quarter, amounting to DKK27m.

Elite Gaming’s gaming hall and its land-based slot business also saw a revenue decline of 1.3% to DKK75m.

The revenue of Danske Klasselotteri remained the same at DKK64m, even though it was merged with Danske Spil, in April 2022. This business holds only two-yearly drawings, and 65% of the ticket sales go into the prize funds.

Swush sales offset higher costs, resulting in a net profit increase.

Cost-wise, the agent commissions remained relatively flat at DKK156m while other gaming costs fell 8.2% to DKK101m. The other costs were relatively flat year on year, despite the fact that external costs increased due to higher prices of goods and services, which were offset by a lower depreciation rate and marginally reduced personnel costs.

The Swush sales generated DKK27m, which offset these two increases. This combined with an increase in revenues left a profit before tax of DKK646m. That’s a 9.9% rise year-over-year.

Danske Spil has paid DKK137m tax. This leaves a profit net of DKK510m compared with DKK459m for Q1 in last year.

For the financial year 2024, revenue projections are unchanged. The range is between DKK5.0bn to DKK5.2bn. Dankse Spil is expecting to report a profit of between DKK1.8bn-DKK1.9bn in FY 2024.

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