Net Entertainment’s financial performance during the third and fourth quarter 2012

Net Entertainment’s financial performance during the third and fourth quarter 2012

NETENT LOGONet Entertainment’s revenues are affected by the development of the Swedish currency in relation to other currencies, mainly the Euro. The majority of revenues are invoiced in Euro. The revenues are reported in Euro which is then calculated to Swedish SEK for the Group’s reporting. Since the end of the previous quarter the Swedish Krona has strengthened significantly towards the Euro which affect Net Entertainment’s revenues negatively in the third quarter.

Furthermore the company’s revenues have been negatively affected by delays of the launch of two large customers and the Olympics during July and August since the Company’s customers, the operators, have focused marketing spending towards sports betting.

Due to the above factors the Company estimates that the revenue growth for the third quarter compared to previous period 2011 is expected to be around 10 percent ( around 20 percent in Euros), which is lower than current market expectations.

During the fourth quarter the Company’s depreciation level is expected to increase as the projects Live Casino and the development related to the UK entry is completed. As the Company grows and different authorities set increased requirements the need to further develop Net Entertainments processes and systems increases which increases costs during the fourth quarter.

Long term Net Entertainment is in a good position and the Company estimates hat the strategic efforts made on Live Casino, the UK entry and mobile games in combination with slot games being available in Italy will generate good revenues during 2013.