Net Entertainment: Earnings report 2008

Full year 2008
• Revenues for the full year increased by 56% to SEK 204.6 (131.1) million
• Operating profit increased by 74 % to SEK 87.8 (50.6) million
• Operating margin was 42.7% (38.3)
• Profit for the year increased by 74% to SEK 80.0 (45.9) million
• Earnings per share amounted to SEK 2.02 (1.16)
• 20 new CasinoModule™ license agreements were signed, with operators such as Victor Chandler, King.com, and Bet-at-home, compared with 18 new agreements in 2007

Q4 2008
• Revenues for the fourth quarter increased by 71% to SEK 61.6 (36.0) million
• Operating profit increased by 100 % to SEK 30.5 (15.2) million
• Operating margin was 49.1% (41.9)
• Profit for the period increased by 96% to SEK 27.1 (13.8) million
• Earnings per share amounted to SEK 0.69 (0.35)
• Four new license agreements for CasinoModule™ were signed

Other
• Proposed dividend is SEK [1.25] (0.75) per share
• The Company’s series B shares began trading at NASDAQ OMX Stockholm on 13 January 2009
• Two breakthrough agreements for CasinoCafé™ were signed in January 2009, thus commercialising the product

Comments from Johan Öhman, President and CEO
“2008 was a record year for Net Entertainment. Our customers and shareholders can be pleased with our strong growth – and it shows no signs of slowing down. December was our best month ever with regards to revenues. Our key products CasinoModuleTM and CasinoCaféTM are continuing to sell well; they were improved during the year and are very well regarded by gaming operators around the world. We made a breakthrough in January 2009 when we signed two contracts for CasinoCaféTM. One with Delta Invest Ltd in Russia that has more than 500 shops and one with PCP Electronics Ltd. Apart from CasinoCaféTM will be launched for full commercial use during the first half of 2009, Delta Invest Ltd has the potential to be our single largest licensee if its projections holds. We are continuing to employ new staff to further increase our production rate while maintaining our high service level to our gradually increasing customer base. As part of this effort, we started an IT project in late 2008 to further strengthen the operating division; it will generate non-recurring costs. The cost for this as well as launch and delivery of CasinoCaféTM are estimated to amount to about SEK 8-12 million during the first half of 2009. Our goal for 2009 is to deliver 24 new games – almost double of what we delivered in 2008.

Net Entertainment is entering 2009 with a product portfolio and customer base that is stronger than ever. And Net Entertainment’s accreditation from industry organisation eCogra in 2008 is a quality and credibility stamp that will drive continued new sales. The listing change to NASDAQ OMX Stockholm is expected to increase liquidity and interest in the shares, which benefits the company and stakeholders.”

About Net Entertainment
Net Entertainment NE AB and its subsidiaries (which together form the Group or the Company) are leading suppliers of digitally distributed online gaming software. The company was established in 1996 and has a customer base of about sixty international gaming companies. Revenues consist of royalties based on revenues generated by the company’s products and setup fees when new agreements are signed. Net Entertainment is a pure development company and thus does not conduct any gaming operations of its own. The company’s brand is internationally recognised and associated with innovation,service, and quality. All technical development is carried out at the Group’s Stockholm office, and all commercial operations such as sales, marketing, and product management are carried out at the Malta office. The parent company is listed on NASDAQ OMX Stockholm as of 13 January 2009. It was previously listed on the Nordic Growth Market (NGM) Equity since 5 April 2007.

Johan Öhman
President and CEO

Questions may be directed to:
Johan Öhman, President and CEO
Phone: +46-8-556 967 00, johan.ohman@netent.com

Bertil Jungmar, CFO
Phone: +46-8-556 967 00, bertil.jungmar@netent.com

Website: www.netent.com

Full report here

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