HELSINKI: Angry Birds game maker Rovio Entertainment warned on profits on Thursday, wiping more than 40 percent off the Finnish company’s shares and leaving investors nursing big losses following a flotation last September.
Rovio blamed increased marketing costs and other investments for the gloomier outlook. Its shares were 45 percent lower at €5.5 in early trade, less than half the IPO price of €11.50.
“That guidance is nowhere near the growth they previously talked about,” said a fund manager with Rovio stock who declined to be named.
It was the latest setback for investors after the stock dropped by about 20 percent after Rovio’s first interim report as a listed company in November.
The company on Thursday forecast an operating margin at 9-11 percent in 2018 versus 10.6 percent in 2017 and said it expected sales of €260-300 million versus €297 million last year.
However, these figures were below analysts’ forecasts of a margin of 14.5 percent and sales of €336 million, according to Thomson Reuters data.
Following the IPO in September, Rovio CEO Kati Levoranta said “the mobile gaming market is expected to grow fast and we are well positioned to take an advantage of this growth.”
Rovio’s largest investor with 40.8 percent of the shares is Trema International, a company owned by Kaj Hed, the uncle of Rovio’s co-founder Niklas Hed.
Rovio saw rapid growth after the 2009 launch of the original “Angry Birds” game, in which players used slingshots to attack pigs who stole birds’ eggs. But the company plunged to an operating loss and cut a third of its staff in 2015 due to tough competition.
Rovio had bounced back in 2016 with a help of its 3D Angry Birds movie, and followed up with the oversubscribed IPO that valued it at $1 billion.
Rovio said in Thursday’s statement it expects to use around 30 percent of its games revenue to add new users in 2018, adding that the cost per user had risen significantly in the market.
“The costs for new users are at a threshold, that’s too high for second-tier games... What Rovio is trying, increasing sales by spending on marketing, the equation just doesn’t work,” said Aaron Kaartinen, analyst at Finnish asset manager FIM.
“Their games don’t have enough natural traction among players.”
Rovio’s game titles include “Angry Birds 2,” “Angry Birds Blast,” “Angry Birds Friends” and “Battle Bay.”
Investors take flight after Angry Birds maker warns on profit
Investors take flight after Angry Birds maker warns on profit
Pakistan, Saudi Arabia reaffirm push for joint energy and mining projects
- In recent years, Saudi Arabia has positioned itself as a leader in the global minerals and energy sectors
- Both sides reaffirm commitment to enhance partnership and promote mutually beneficial investments
ISLAMABAD: Pakistan and Saudi Arabia have agreed to enhance cooperation in energy and mineral sectors, the Pakistani information ministry said on Friday, as the two sides seek to deepen economic ties and promote joint investment.
The development comes weeks after Pakistan’s Petroleum Minister Ali Pervaiz Malik met Saudi Arabia’s Minister of Industry and Mineral Resources Bandar Ibrahim Alkhorayef at the Future Minerals Forum in Riyadh that saw participation from 13 public and private Pakistani firms.
Pakistan petroleum ministry said Alkhorayef had pointed out “vast opportunities” for cooperation between Pakistan and Saudi Arabia in the minerals sector, adding that the Kingdom would support the development of Pakistan’s mining industry through its knowledge and technical expertise.
On Friday, Malik held a meeting with Nawaf bin Said Al-Malki, Saudi ambassador to Pakistan, to discuss areas of mutual cooperation and further strengthen bilateral relations between the two brotherly countries, according to the information ministry.
“Both sides reviewed ongoing collaboration and explored new avenues for cooperation, particularly in the energy and minerals sectors,” it said in a statement. “They reaffirmed their commitment to enhancing economic partnership and promoting mutually beneficial investment opportunities.”
In recent years, Saudi Arabia has positioned itself as a leader in the global minerals and energy sectors and accelerated investments in green technologies, sustainable mining practices and international collaborations that are shaping the future of the mines and mineral industry.
Last year, Saudi Arabia’s Manara Minerals, a Public Investment Fund and Maaden joint venture, also expressed intent to acquire a 15 percent stake in Pakistan’s Reko Diq gold and copper mine. The $7 billion project, located in Balochistan, is being developed by Canadian mining giant Barrick Gold in partnership with Pakistan’s federal and provincial governments.
Malik expressed confidence that longstanding brotherly relations between Pakistan and Saudi Arabia would translate into tangible outcomes, fostering investment, technology exchange, and sustainable development initiatives for mutual benefit.
Ambassador Al-Malki appreciated Pakistan’s active participation in the Future Minerals Forum, which offered significant opportunities for regional collaboration, according to the statement.
“Both sides agreed to maintain close coordination to further strengthen economic and strategic cooperation in the coming period,” the information ministry added.
