02-May-2009, 22:26
Australian online-gaming operator Centrebet International Ltd. said last week that its earnings outlook for the fiscal year ending June 2009 would be worse than expected. The company forecast that its net earnings would be 30 percent lower than the 14.3 million Australia dollars ($10.4 million) it predicted in February.

The downgrade in projected net earnings accounts for a 20 percent decrease in net profit after tax, plus a 10 percent additional decrease due to several losses Centrebet incurred – including unrealized foreign exchange losses, a one-time loss due to the company’s withdrawn offer for All Sports Ltd., staff costs and a large bad-debt write-off.

Centrebet explained the largest portion of the downgrade as a result of poor February and March wagering win rates. All told, the company expects its net 2009 earnings to be between $5.4 million and $6.2 million, down from its $9.5 million in earnings last year.

Despite the negative earnings report, Centrebet Managing Director Con Kafataris said the company’s long-term outlook remains strong.

“Pleasingly, trading during April has been strong,” Kafataris said. “We conducted a detailed review of our cost base with annual cost savings in excess of ($1.4 million) being implemented, the Australian online wagering market continues to grow strongly and we will commence our fixed odds management contract with the (Western Australia), (Australian Capital Territory), and Tasmanian TABs in late May, estimated to deliver in excess of ($732,600) in net profit after tax for (the fiscal year ending June 2010).”

Shares in Centrebet International Ltd. (ASX:CIL) closed Friday at 1.20 Australia dollars per share in Sydney.



- Phill Provance
phill.provance@gamblingplanet.org