The Austrian gaming company Novomatic has reported lower profit in the period of six months ending June 30, as higher costs have offset an increase in revenue.
Novomatic continued to report inflationary pressures during H1. In the first half of 2018, Novomatic reported that inflationary pressures continued.
In the first half 2023, the business reported EUR1,58bn of revenue. This is up by 20.0% compared to the EUR1.32bn that was announced for the same period last year. Supplier attributed increase in revenue “to good performance and demand for its products”.
Novomatic Online’s revenue grew across all market segments.
According to the provider, the rental of slot machines accounted for the largest increase in revenues, increasing by EUR124,5m or 20,8%. The gaming technology division of the company reported EUR574.2m revenue for H1 2023.
Novomatic’s revenue increased by EUR40.2m in Germany, Italy, and Eastern Europe.
EUR25,8m and EUR24.9m.
Acquisitions were also cited as the reason for revenue growth.
Revenue increases more than offset by increased costs
Total gambling taxes and fees amounted to EUR 207.5m in the first half of 2018. The increase was 29.6% from last year. This was due to a general rise in revenues, according to the business.
Costs for material and services were also increased due to the increase in revenue generated by renting gaming machines. They increased by 9.1%, to EUR168.m
Personnel costs increased from EUR498.5m to EUR101.4m. This is a rise of 25.5%. The increase in personnel costs was due to M&A activities during the past six months, and high inflation that led to higher wages.
Ineor d.o.o. and Alteatec Group were acquired by Novomatic in the first half of 2023 through Greentube. This division is responsible for digital gaming and entertainment. The company also bought Italian arcade operator, 187 Srl as well as several small UK slots parlors in the first six months of 2023.
Other operating costs rose by 26.5%, to EUR441.8m. This was due to increased advertising expenses in Eastern Europe and online. The rise was also attributed to energy costs and fluctuations in exchange rates.
Novomatic’s profits fall by H1 due to finance costs
Novomatic’s earnings before interest tax depreciation, and amortization (EBITDA), after expenses, were EUR386.1m. This was an increase of 3.9% over the prior year. Both the supplier’s increased revenue and costs were attributed to changes in macroeconomic developments.
A significant increase in financial costs, from EUR0.6m up to EUR36.6m in the period under review, resulted in a reduction of profits. The rise in interest rates was the cause.
Novomatic has reported a pre-tax profit of EUR161.2m. The company reported an overall result of EUR98.3m after paying EUR62.9m as income tax. The company’s announcement of EUR122.9m last year has been reduced by 20%.