STOCKHOLM, April 27 (Reuters) – Sweden’s Evolution Gaming Group beat expectations with a 150% jump in first-quarter core earnings as pandemic lockdowns boosted demand for online casino games, particularly in Asia and the United States.
The company’s shares rose 6.5% to a record high of 1,555 Swedish crowns in early Tuesday trading.
Evolution Gaming, which develops and licenses casino games, dominates the market in Europe and its purchase of NetEnt for $2.12 billion last year gave it several top 10 slot titles such as Starburst and Piggy Riches.
The live casino games business saw operational challenges that limited the effects of the pick up in demand, but the slots business had a very strong quarter, Chief Executive Martin Carlesund said in an interview.
Asia and North America continue to be the two main sources for growth for Evolution, with revenue in Asia more than doubling and up around three times in North America.
Growth prospects remain good in the United States as more states consider making online gambling legal to boost tax receipts.
Quarterly earnings before interest, taxes, depreciation, and amortisation (EBITDA) jumped to 160.1 million euros ($193.27 million) from 64.1 million a year ago, beating analysts’ mean forecast of 144.3 million euros, according to Refinitiv estimates.
The EBITDA margin rose to 67.9% from 55.7% a year earlier.
With NetEnt, Evolution’s offering has become a must-have and reminiscent of a monopoly, according to research firm Redeye.
Carlesund said the company had achieved its target of 40 million euros of cost synergies from the NetEnt deal nine months earlier than planned.
Evolution spent another 450 million euros to buy Australia-based online slot machine developer Big Time Gaming earlier this month.
The company is looking for more acquisitions, Carlesund said.
($1 = 0.8284 euros) (Reporting by Supantha Mukherjee in Stockholm. Editing by Niklas Pollard and Mark Potter)