CryptoLogic reports losses for the third quarter

The company reported a net loss of us$ 5.886 million for the quarter including a foreign exchange loss of us$ 4.2 million previously reported in September due to the rapid and unexpected appreciation of the US Dollar against the Pound and Euro. This is a significant downturn from the us$ 2.392 million in profits declared for the same period in 2007.

Revenues from the company’s online casino were slightly over us$ 10.1 million compared with us$ 10.8 million for the second quarter while those from poker were reported as us$ 3.2 million, which were also down from the us$ 3.6 million for the second quarter. CryptoLogic attributed these declines to the combination of reduced Internet gaming over the summer months with abridged marketing activity by one of its major licensees.

Revenues for the nine months ending in September were us$ 50.2 million, a decrease of 5.9 percent when compared with the same period in 2007. However, the firm revealed that revenues were essentially flat after adjusting for certain non-recurring benefits recorded in the first nine months of 2008 and 2007.

Operating expenses for the quarter were us$ 16.5 million, or 117.5 % of revenues, compared to us$ 11.8 million, or 67.3 % of revenues, last year. In addition, those announced for the previous nine months came in at us$ 44.1 million, or 87.9 % of revenues.

The Irish firm stated that its outlook for next year was favourable following significant new customer wins and last week’s announcement of a new strategic poker partnership with America’s GTech Corporation that will help it to reduce operating expenses and increase profitability.

“In a challenging year for our company and our industry, we recognize that we must do better and that is why CryptoLogic is aggressively implementing its strategy to achieve profitability and growth in 2009,” said Brian Hadfield, President and CEO for CryptoLogic.