While Paf reported a revenue record of EUR177.1m ($191.4m/PS150.8m), the Nordic operator also warned that higher gaming taxes would likely affect its profits moving forward.
Paf had another successful financial year. Revenue was up 6.9% year on year. Paf’s net profit also increased by 23.0% to EUR55.1m. This is a new record.
Christer Fahlstedt, the CEO of Paf, welcomed this news, but he warned about future profits. Fahlstedt emphasized that the rising taxes on gaming in different markets would likely affect net profits in future years.
The temporary tax reduction for lottery games in Finland has now ended. Rates have now increased from 5% up to 12%. The Swedish gambling tax will increase from 18%-22%. Estonians can expect a 5%-6% rise, and Latvians can expect 12%.
Fahlstedt stated, “We are happy and proud of the last year.” We have a bigger customer base and our active customers are up 27%. This explains a part of the increase.
We are aware, however, that Finland’s temporarily lower gaming tax has also contributed to the outcome. “The trend towards increasing gaming tax will continue.”
Fahlstedt mentions the “much-needed” demand for more responsible gaming. Paf decided this month to reduce the loss limit for players between 20-24 years old to EUR 8,00. Paf lowered its online mandatory loss limits in April 2023 from EUR20,000 down to EUR17.500.
Fahlstedt stated that the changes will lead to a reduction in profitability for many operators. Paf, however, is prepared to face the challenges ahead.
Increased revenue at Paf due to online growth
When analyzing revenue in 2023 it becomes clear where the growth comes from. Paf’s online revenue grew 8.2%, to EUR 153.8m. The company noted strong growth in Sweden, Spain, and Latvia.
In June 2023, Paf acquired William Hill Latvia SIA (facing Latvia) and SIA Mr Green (facing Latvia). Paf claims that these deals generated additional online revenues of EUR5.1m.
Paf reported an increase of 27.3% in online registered customers, to 615.557. The operator anticipates that this number will continue to increase in 2024, with the help of ongoing marketing campaigns.
In Paf’s second business, revenues from land-based businesses and ships fell by 0.9%. They now total EUR 23.3m. The overall number of passengers on ships in 2023 increased by 4.0%.
Paf has signed new agreements with Eckero and Tallink Group, and also welcomed Finnline’s M/S Finnsirius. Paf launched in Helsinki its first GameRoom, in partnership with Pikseli. GameRoom is a concept that combines amusement and entertainment.
Paf has also noticed an increase in the use of cashless payment options. All amusement machines and almost half-money slot machines offer this option. Paf claims that this is in response to customer requests for more convenient payment methods.
Paf stated that “Through this action and innovation, we are looking forward to continuing growth and improving our services and offerings.”
Net profit rises on revenue growth
Materials and service expenses increased 7.9%, to EUR42.6m. The staff costs remained flat at EUR24.2m, while depreciation & impairment increased only slightly to EUR10.6m.
Paf’s net financial gain of EUR723,605 was a slight increase over the EUR52,9m in other operating costs.
It was therefore left with an pre-tax income of EUR60.0m. This is a 27.9% increase year-on-year. The net profit in 2023 increased by 23.0% after paying EUR5.2m of tax, and accounting for EUR305.468 deferred taxes.
Paf noted also that it was able to distribute EUR31.4m of funds in 2023 due to higher revenues and profits. The funds will be used to benefit the society, including third-sector organisations working in areas such as social work, culture, sport, youth work and environmental activities.
Jan-Mikael Von Schantz, chairman of Paf said: “It is undeniably fantastic that Paf has achieved a tremendous result. This allows us to disburse a total amount of EUR31.4m.” The employees did a fantastic job in the last year. We would like to express our gratitude for all Paf staff who made it possible.
