Bad results for Cryptologic

Online gambling software and games developer Cryptologic has reported another disappointing quarter in delivering its Q1 2009 report. President and CEO Brian Hadfield attributed the dismal results to the "challenging" economic environment and strong US dollar, and said that the company continued to try to constrain costs, accelerate innovation and focus on execution in its business affairs.

The results constitute the fourth consecutive losing quarter for the company, although management said it is on track to returning to profitability and cash generation in 2009, in line with prior guidance. Cryptologic's previous guidance calls for full-year net income of $9 million - $10 million.

Net loss was $1.3 million, compared to profit of $609 000 in the first quarter of 2008. In the preceding fourth quarter 2008, net loss was $25.97 million.

Revenue fell 48 percent to $10.13 million from $19.32 million in the same period last year, impacted by lower spending from the most avid players, coupled with the continued assault of the strong U.S. dollar.

Operating loss was $3.05 million, compared to profit of $458 000 in the previous year.

Hadfield commented: "In very challenging times, CryptoLogic continues to control what we can: containing costs, accelerating innovation and focusing on execution." Reduced wagering was noted in both casino and poker operations.

During the latest quarter, the company completed the cost-saving integration of its poker network with that of GTECH Corp. CryptoLogic stated that the move enables significantly its cost base, and expects to realise the full benefit of the integration from the second quarter.

Hadfield said that licensing deals signed during the quarter with partners such as The Gaming Network, Gala Coral and Paramount Digital Entertainment had laid “the foundation for a return to profitability and cash generation this year."

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