In the first half of 2024, Veikkaus, Finland’s primary gambling operator, has experienced notable changes in its financial performance. The company, which is pivotal in the Finnish gambling sector, released its financial results, revealing a mixed bag of challenges and strategic moves.
Revenue and Profit Decline
Veikkaus reported a total sales revenue of €483.8 million ($535.4 million) for the period between January and June 2024. This figure represents a 6.8% decrease compared to the same period last year. The decline in revenue is significant, reflecting broader trends and specific challenges faced by the company.
Breaking down the revenue, Veikkaus saw a substantial drop in gross gaming revenue. The introduction of an authentication requirement for physical sales ticket-based games last year has led to a 21% decrease in this segment. The situation worsened with scratchcards, where the authentication requirement contributed to a dramatic 44% decline in this category.
Despite the overall revenue downturn, Veikkaus reported an operating profit of €246.9 million, marking a 20.4% decrease year-on-year. Profit for the period also fell by 19.1%, amounting to €252.3 million. These declines in profitability are attributed to major investments and an increase in the lottery tax.
For Veikkaus Oy, the parent company, gambling operations revenue decreased by 7% to €482.8 million, with operating profit falling by 20.1% to €250.2 million.
Customer Trends and Digital Shift
One of the noteworthy aspects of Veikkaus’ performance is the increase in the number of customers, which suggests that while revenue from physical gaming has decreased, the company’s customer base is growing. Additionally, the share of digital channels in gross gaming revenue has risen to 60.5%. This shift indicates a growing preference for digital gambling options among customers, aligning with broader industry trends towards online platforms.
Strategic Investments and Future Outlook
Veikkaus CFO Regina Sippel emphasized the company’s strategic approach during the first half of 2024. Sippel highlighted that Veikkaus has been focusing on implementing its strategy, which includes significant investments in business development and international growth. The establishment of Fennica Gaming, which achieved notable results in the first half of the year, is part of this strategic initiative.
Sippel also expressed optimism about the upcoming overhaul of the gambling system, viewing it as a significant opportunity for Veikkaus. The company plans to continue investing in business development and enhancing the customer experience, signaling a forward-looking approach despite the current financial challenges.
Genting Malaysia Berhad
In contrast to Veikkaus’ performance, Genting Malaysia Berhad has reported positive financial results for the first half of 2024. The company experienced an 8% increase in revenue during the second quarter of the year. This growth highlights Genting Malaysia’s robust performance and contrasts with the challenges faced by Veikkaus.
Veikkaus’ first half of 2024 has been marked by a revenue decline and reduced profitability, influenced by regulatory changes and increased operational costs. However, the company’s investment in digital channels and strategic development points to a proactive approach in navigating these challenges. The growth in digital revenue and the positive outlook for future regulatory changes suggest that Veikkaus is positioning itself for long-term success despite the current financial setbacks.