Home » OCW News » March 2010 » PartyGaming Upbeat Despite Earnings Drop

PartyGaming Upbeat Despite Earnings Drop

Date published: 5 March 2010

This SlideShowPro photo gallery requires the Flash Player plugin and a web browser with JavaScript enabled.

Despite reporting a drop in EBITDA (earnings before interest, tax, depreciation and amortisation) of $135m for the year end to December 2009 from $144.2m in 2008, Gibraltar-based online gambling giant, PartyGaming Plc, is optimistic about its prospects in 2010, despite uncertainty in the industry.

Said PartyGaming CEO, Jim Ryan, '2009 has been a tough year, but I believe it's been a year in which we have made significant progress.' Ryan went on to say that PartyGaming's tried and tested business model is 'continuing to generate strong cash flow' even though the macroeconomic environment is still uncertain.

PartyGaming, which owns and operates popular gambling sites PartyPoker, PartyCasino and PartyBets, said that its current trading is in line with expectations of the board. As a result of the company's positive stance, its share price rose Thursday on the London Stock Exchange (LSE) following early trading losses.

As at 11:55am GMT on Thursday this week, PartyGaming stock increased 1.5 per cent to 308 pence, valuing the online gambling firm at £1.26 billion. Over the past 12 months, the company's share price has risen 46 per cent. In addition, its earnings of $135m were higher than the $133.3m forecast by analysts.

Don't miss...

But PartyGaming total net revenue dropped to $444.7 million from $472.9 million in 2009, greatly affected by the ongoing weakness of the GB pound against the US dollar, coupled with a drop in its online poker revenues to $196.7m from $274m. The total group figure of $445.1m came in below expectations.

However, PartyGaming is expecting its online poker revenues to grow in 2010, following a turnaround in its online poker division at the end of last year. In its fourth-quarter, PartyGaming managed to reverse an 18-month downward swing of quarter-on-quarter revenues when it posted a 9 per cent increase.

Like many of its rivals, PartyGaming is banking on the highly lucrative U.S. online gambling market to re-open in the not-too-distant future, as well as aiming to make the most of online gambling industry changes in Europe, as more EU member states fall in line with EC-directed online gambling free trade agreements.