CryptoLogic Shows a Loss in 2010 Figures

March 25, 2011 | News Category: Casino Software

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CryptoLogic, the online casino software provider, has been struggling for the past few years financially, and has consistently shown a loss in revenue. Even though the online gambling software provider has made various cuts in its operating expenditure in the past year, the final numbers for 2010 still show a loss.

In 2009, the annual net loss of CryptoLogic was $35.5 million, and in 2010, the annual net loss was $20.4 million. Although the company is still making a large loss, the 2010 figures show that the loss in the most recent financial year was about $15 less than the company had sustained in the previous financial year, 2009.

The company had drastically cut costs in many areas, along with restructuring, in order to cut down their expenses.

CyrptoLogic's management pointed out various key factors from the 2010 financial report. The company reduced their expenditure by 39% in 2010 when comparing the financial reports of 2009. In 2009, the company lost a big customer, and the results of this loss are made clear in the 2010 financial report that shows the company's total revenue was lower than 2009's revenue. The new Instant Click gaming package was launched in 2010.

CryptoLogic's management also note: "While the additional restructuring measures taken since August 2010 have significantly reduced the total recurring cost base and cash outflow, improving revenue performance remains a key management priority. In addition, the Board continues actively to examine strategic options both to strengthen the company's operations and deliver shareholder value."

Management noted that the competition was strong in 2010, which resulted in the company having disappointing financial results.

In the fourth quarter of 2010, there were significant changes seen after the company restructured much of their existing business. The management report states: "Following senior management changes in August 2010, additional restructuring measures were implemented to reduce the annual cost base and stabilize the business. The full impact of these actions, as expected, was felt in the fourth quarter with a significant reduction in the company's cost base and cash outflow."

The fourth quarter shows that the August changes had positive results for the company's finances. The net loss was lowered when compared with the second quarter, as was the cash burn. The total expenses were radically down, and the operating costs decreased by 47%. Administrative and general expenses were lowered by 59%.

The revenue from the branded games stayed at around the same rate, and there were 14 new branded games released in the fourth quarter.

2011 is likely to show whether the measures taken to cut costs are being effective in the long term.

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