Interim Report for the Period January 1, 2024, to March 31, 2024
January – March 2024 in Summary
- Net Revenue of SEK 381.7 (571.7) million, representing an FX-adjusted decline of 33.4 percent.
- EBITDA of SEK 86.6 (189.6) million.
- Adjusted EBITDA of SEK 61.7 (189.8) million.
- EBIT of SEK 40.0 (138.8) million.
- Adjusted EBIT of SEK 15.2 (139.0) million.
- Profit before tax of SEK 34.1 (129.2) million.
- Earnings per share of SEK 0.17 (1.00). Adjusted earnings per share of SEK -0.05 (1.00).
- Cash flows from operations of SEK -14.2 (170.6) million.
- Cash balance of SEK 466.8 million with no bank debt at group level.
Comment from Ji Ham, Acting CEO of EG7:
EG7 delivered Net Revenue of SEK 381.7 (571.7) million, EBITDA of SEK 86.6 (189.6) million and Adjusted EBITDA of SEK 61.7 (189.8) million for the first quarter, corresponding to an Adjusted EBITDA margin of 16.2 (33.2) percent. The first quarter was steady but relatively quiet. The results are reflective of a quarter in which there were no major content or product releases and no boost this time from My Singing Monsters’ (MSM) viral uptick. Relative to last year’s supercharged quarter, it is down but relative to the tough market backdrop, it was a reasonable quarter.
Overall, the group’s financial position is solid and our medium to long-term outlook remains positive. As previously communicated, 2024 will be a transition year. Beyond our steady live service games portfolio, the major driver for 2024 will be MechWarrior 5: Clans (MWC) releasing latter part of this year. It is the first middle market AA title from our pipeline. Until then, the group is expected to perform steadily. Following MWC will be Cold Iron’s new title slated for 2025, continuing to build momentum towards our published targets for 2026.
The gaming industry has been facing major challenges for the last few quarters, something we expect to be sustained for the near future. For some time, we have anticipated and have prepared for such market correction. As a result, the group is well-positioned relative to many of our peers to withstand the market challenges. Our financial health remains strong with ample liquidity, strong balance sheet and an underlying portfolio that continues to generate recurring cash flows. Our financial strength allows for continuing focus and execution against our long-term goals without detours or distractions and we remain confident in the group’s long-term strategy and plans.
For the full year 2024, we still expect to be able to achieve our published guidance of SEK 1.8 billion in Net Revenue. However, given the on-going market weakness, the near-term risk has increased especially for our service business units, and we will be actively monitoring the performance for adjustments as necessary going forward.