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505 Games’ parent company, Digital Bros, has reported a net loss of €3.2 million, and a net financial debt of €10.1 million.
In its half-year financial report for the six months ended December 31st, 2018 – the first half of the 2018/19 financial year- the company reported consolidated gross revenues of €30.2 million, decreasing by 31.4 per cent year-over year. The report also details EBITDA (Earnings before interest, tax, depreciation and amortisation) at €136 thousand, compared to €3.7 million on December 31st , 2017, and a negative EBIT of €4.1 million compared to a negative €141,000 YoY. That puts Digital Bros with a pre-tax loss of €3.9 million, compared to pre-tax profit of €87 thousand on December 31st, 2017.
The company expects gross revenues for the fiscal year on June 30th, 2019, to broadly fall in line with previous fiscal year, with an expected profit in the second half due to the release of Bloodstained and Indivisible in the final quarter of the financial year.
"The Group did not launch any significant new video game on the international markets in the first half of the current fiscal year," the report stated. "Following this, the consolidated gross revenues were €30,216 thousand, -31.4% compared to €44.062 thousand of the same period of the last fiscal year.
"The Premium Games operating segment had the most significant decrease. Gross revenues amounted to €19,787 thousand, down by 35.3 per cent, compared to €30,584 thousand in the same period of the previous fiscal year," it added. "The Italian Distribution operating segment revenues decreased by 32.3 per cent compared to previous year due to a drop in retail video games sales and collectible cards distribution.
"By contrast, Free to Play operating segment revenues showed a €470 thousand increase, up by 17 per cent, due to a positive performance of Gems of War. The video game, now in its fourth year, generated more than two third of the total operating segment sales."
The company lists several significant events that affected its performance during the reporting period. In August 2018 the non-executive director Bruno Soresina died, and in September, 2018, non-executive director Elena Morini resigned from the Board for personal reasons. Consequently, the board of directors established three Board committees comprising non-executive directors Guido Guetta, Luciana La Maida and Irene Longhin.
