The Stars Group Posts Net Loss in Q3 2019 Despite an Increase in Revenue
Total revenue for the most recent three-month period reached $622.5 million, which represents an 8% increase when compared to the corresponding period of last year.
Revenue Going Up
According to available data, the Toronto-headquartered gaming giant ended the period in question with a net loss of $51.7 million, despite the good results in the UK and Australia.
Speaking about the UK, it should be noted its revenue went up by nearly 35% to $227 million. The main driving force behind this improvement was the fact The Stars Group-owned Sky Betting & Gaming during the entire three-month period ending on September 31, 2019. Back in Q3 2018, the acquisition was completed in mid-July.
Sports betting brought in $130 million in revenue in the UK market, while gaming contributed $85.2 million.
The Stars Group has proudly revealed its business in Australia had an excellent quarter, generating 95.6% more revenue when compared to the previous year.
The company’s business in the Land Down Under – which includes the CrownBet and assets formerly owned by William Hill Australia – recorded $71.2 million in revenue. Betting was the biggest contributor here as well, earning $70 million – 34.2% more than in 2018.
And although the company’s international operations earned the biggest portion of the overall revenue, the number represents a decline of 7.7% from Q3 2018 for a total of 325.5 million.
All of the company’s divisions, but one, saw their revenues decline from the last year’s figures. Poker went down by 10.8% to 189.9 million, with betting also recording a drop – 13.7% to $18.1 million. Gaming improved its results from Q3 2018 – albeit slightly, by 1.6% to $109.3 million.
Slipping to Net Loss
Expenses increased across the company’s entire business during the latest quarter. General and administrative costs went up by 25.6% to 335.5 million, while research and development costs slightly increased to $13.3 million. The numbers reveal the company cut its sales and marketing expenses by 1.2% to $91.4 million.
More money spent during this period resulted in a net loss of 51.7 million, a completely different result when compared to the corresponding period of last year when The Stars Group posted net earnings of $9.7 million. At the same time, operating income dropped by 77.1% to $16.3 million, with loss before income taxes reaching $41.9 million.
In Line With Expectations
Since the beginning of 2019, The Stars Group generated total revenue of $1.84 billion, 33% more when compared to the first nine months of 2018. Net loss improved to $19.4 million, although operating income dropped by 7.7% to $171.8 million.
Commenting on the recent results, Rafi Ashkenazi, CEO at The Stars Group said the company’s third-quarter had been robust and in line with expectations, supported by strong revenue growth in the UK and Australia, which had helped offset both the ongoing disruption in certain of the company’s lower-priority international markets and continued foreign exchange headwinds across the business.