Svenska Spel cuts more than 200 jobs in faltering Casino Cosmopol business
Swedish operator reports 14% Q4 revenue decline as land-based operations lose SEK250m
Svenska Spel has confirmed that 218 members of staff working in its Casino Cosmopol land-based casino business have been made redundant due to recurring Covid-19 closures.
The firm said the departures form part of a general reorganisation of its land-based portfolio, which has become a loss-making entity during the pandemic.
Of Svenska Spel’s 1,573 staff members, more than 45% (720) work in the Casino Cosmopol business, all of which were put on short-term leave in March.
The 218 job losses have cut that total to 502, while a further 68 employees left the business following the closure of the Sundsvall casino site.
Elsewhere, the former monopoly operator has revealed a 14% year-on-year decline in net gaming revenue (NGR) for the final three months of 2020.
Overall NGR for Q4 dropped to SEK2.1bn, an annual decrease of SEK348m. However, this decline was primarily due to a non-recurring income event which increased NGR by SEK163m in 2019.
This was then offset by a SEK250m fall in land-based casino revenue due to the pandemic. Operating profit for Q4 decreased by 11%, dropping to SEK690m, with the firm taking a SEK121m hit from land-based closures.
Despite the damage, Svenska Spel’s operating margin increased from 31% to 32%, as costs were lowered alongside NGR.
Svenska Spel’s sport and casino division, which encompasses the group’s online operations, reported a 4% drop in Q4 to SEK634m. Lottery-based revenue fell to SEK1.3bn, a slide of 3% on Q4 2019 figures.
Svenska Spel’s Casino Cosmopol business reported the biggest revenue dip, falling 62% in Q4 2020 to SEK167m. At a full-year 2020 level, Svenska Spel NGR tumbled 11% to SEK7.6bn, with operating profits for the same period dropping by 3% to SEK2.3bn.
“We have good profitability for the group and strengthen the operating margin for both the quarter and the full year, despite the fact our physical casinos have been closed for three quarters,” Svenska Spel CEO Patrik Hofbauer said.
“As in the previous quarter, revenue for our sport and casino and Tur business areas are increasing.
“This shows strength and stability that two out of three business areas deliver growth despite the fact they are also affected by Covid-19 in the form of temporary gaming responsibility measures and reduced sales in stores,” Hofbauer added.