LeoVegas revenue has dropped marginally by 1% to €98.7m in Q3 2022, a period heavily influenced by MGM Resorts’ acquisition of the business.
Adjusted EBITDA for the period totalled €7.1m, down 38% from the €11.5m reported in Q3 2021, corresponding to an EBITDA margin of 7.2%, down from 11.6%.
The operator partially explained the net loss was due to transaction-related costs, a gaming tax provision and expenses relating to its cancelled launch in New Jersey.
The company also posted higher expenses in several further operating areas, as marketing costs rose from €36.2m in Q3 2021 to €37.8m in Q3 2022, and personnel costs increased from €12.4m to €16.3m over the same reporting period.
Q3 was an eventful period for the iGaming operator. At the beginning of September, LeoVegas’ shareholders approved the sale of 96% of the company’s shares to American casino giant MGM Resorts.
An additional 2% of the company’s shares were acquired during the extended tender offer acceptance period that ended on 22 September, the date when LeoVegas’ shares were delisted from Nasdaq Stockholm.
In October, MGM Resorts International named Gary Fritz as chairman of LeoVegas, while Gustaf Hagman will remain CEO of LeoVegas.
However, LeoVegas AB still has bonds listed on the Nasdaq Stockholm, and its Q3 report therefore reflects those reporting requirements.Moreover, the company noted that due to the change in ownership and delisting of the company’s shares, bondholders now have the right, but are not obliged, to redeem bonds outstanding at a price corresponding to 101.00% of the nominal amount and including any accrued interest. The redemption offer expires in November.
In line with its Q2 results, the operator saw strong growth in the Nordic countries between July and September 2022.
In Q3 2022, NGR increased 20% year-on-year. While no country-by-country data was provided, LeoVegas highlighted that its Swedish brand Expekt had recorded new all-time highs, while NGR in Finland had declined substantially due to a change in legislation from the beginning of the year.
For the Rest of Europe region, NGR decreased 19% in Q3 2022 compared with Q3 2021. LeoVegas said it had continued to feel the effects of its exit from the Netherlands at the end of Q2 2021, while Germany had also negatively impacted the region’s sales.
In the Rest of World region, NGR had declined 10% year-on-year. According to LeoVegas, the trend had been favourable in most markets in the region but had been adversely impacted in the short term by new regulation in Ontario, Canada, as well as by LeoVegas’ departure from a couple of smaller markets in the region during the quarter.
Yesterday (2 November) MGM Resorts reported a surprise loss and shares fell by as much as 8% in after-hours.
