Quarterly report

Kindred sees revenue up 6% to $410M in Q3, boosted by strong casino performance

Kindred CEO Henrik Tjärnström at Webcast Q3 2021 on October 27.
Reading time 2:18 min
Underlying EBITDA grew 13%, while active customers increased to 1.7M. Casino revenue increased 16%, and Western Europe was the best performing region. Gross winnings revenue for the first 9 months of the year has increased by 33%. However, due to the ceasing of services in the Dutch market and a weak sports betting margin, the first days of October have seen a decrease in revenue compared to last year.

Kindred Group shared on Wednesday its report for the third quarter of the year. The company posted double-digit earnings growth, driven by a strong casino performance. Gross winnings revenue for the period increased by 6% (11% in constant currency) to $410 million, while underlying EBITDA grew 13% to $115.6 million.

Other highlights of the period include an increase in the number of active customers to 1.7 million, and free cash flow amounting to $70.3 million. Profit after tax for Q3 was $83.2 million.

“I’m pleased to present a strong Q3 performance,” said CEO Henrik Tjärnström. He claims the continued focus on costs and scalability permitted the company to deliver strong underlying EBITDA in a period of low sports seasonality.

Despite the low sports season, the company posted strong casino activity, which generated an increase in casino gross winnings revenue of 16% to $231.3 million versus the same period last year. Tjärnström calls this a “testament to our strong multi-product offering.”

At the end of the quarter, the online gambling operator decided to cease services to Dutch residents. Subject to KSA license application approval, the group expects to be awarded a license “in Q2 2022.”

“The opening of the online gambling market in the Netherlands is a very positive step for all involved and we look forward to making a positive contribution to the Dutch society in achieving a sustainable gambling market,” added the CEO.

The group has also shared an update for the first nine months of the year. Gross winnings revenue has increased by 33% (34% in constant currency) to $1.3 billion, while underlying EBITDA grew by 76% (83% in constant currency) to $407.5 million.

The company has also commented on the recent acquisition of Relax Gaming, which concluded on October 1. “This is a great development for Kindred,” said Tjärnström. “It further enables us to significantly differentiate both new and existing products, ultimately giving us more control of the offerings and providing our customers with a better experience.”

Due to the ceasing of services in the Netherlands, and an exceptionally weak sports betting margin during the first days of October, Kindred has now decided to communicate non-recurring indicative guidance for the full fourth quarter of 2021.

Depending on activity levels and the sports betting margin for the remainder of the quarter, Kindred estimates gross winnings revenue for Q4 to be in the range of $302.4 million to $357.3 million.

Daily gross winnings revenue for the first 24 days of the current month was 61% (59% in constant currency) lower than the daily average for the same period last year, while the number of active customers decreased by 13% compared to the same period last year.

The daily average gross sports betting turnover decreased by 21% (17% in constant currency) compared to the same period last year, while the daily average gross winnings revenue from casino decreased by 24% (21% in constant currency) compared to October 2020.

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