Despite posting an eight per cent increase in revenues in its third quarter, Canadian-based online operator Amaya, who owns the PokerStars brand, has issued a profit warning.
Amaya said its full-year revenues would be 11 per cent to 14 per cent lower than its previous estimate.
The operator blamed the strength of the dollar for a 19 per cent decline in the purchasing power of its customer base.
David Baazov, Amaya’s Chairman and CEO, said: “The general strengthening of the US dollar relative to certain foreign currencies, primarily the Euro, has resulted in an approximate 19 per cent decline in the purchasing power of our customer base and has had a significant negative impact on our revenues, higher than we previously anticipated.”
Third quarter revenues increased eight per cent to approximately $325m with online casino comprising approximately 14 per cent of Q3 2015 revenues, with the remainder almost entirely from real-money online poker.
Revenues grew approximately 19 per cent on a constant currency basis and normalizing for the levy of certain value added taxes (VAT) in European Union jurisdictions in the amount of $5m, and certain ‘extraordinary events’ with respect to our real-money operations in Portugal, Greece and certain additional smaller markets.
These extraordinary events included the temporary suspension of real-money operations in Portugal as of July 2015 in anticipation of a new regulatory and licensing regime, the impairment of real-money operations in Greece as a result of the severe economic slowdown in that country and the capital controls and banking restrictions imposed by its government in 2015, and the suspension of operations in approximately 30 other jurisdictions following Amaya’s acquisition of the Rational Group in 2014.
“Since Amaya’s acquisition of its B2C business, we have consistently delivered shareholder value,” said Mr. Baazov. “And, despite multiple recent global challenges to our core business, we believe we are well positioned to increase our cash flow and continue to grow our customer base in 2016 through a number of initiatives.”
The B2C business added an aggregate of approximately 1.85m customer registrations during the quarter, with registered customers totalling approximately 97m as of September 30, 2015, approximately nine per cent more than a year earlier.
The aggregate number of unique customers who played a real-money online offering during the quarter was approximately 2.2m, of which approximately 94 per cent played on PokerStars, an approximately three per cent decline from Q3 2014 driven by the impact of the Extraordinary Events.
Mr. Baazov added: “Other factors negatively impacting our previously anticipated revenues included a recent strategic decision to delay the rollout of significant aspects of our new online sportsbook offering across geographies while we enhance the consumer product experience and complete the product offering, as well as the temporary cessation of our operations in Portugal and Greece. Due to this anticipated decline in revenues, we are also projecting less Adjusted EBITDA and Pro Forma Adjusted Net Earnings than our previous guidance.”