CD PROJEKT H1 2018 Financial Results

Key insights

6 takeaways

01
CD PROJEKT reported H1 2018 net revenues of 168.4 million PLN and a net profit of 52.4 million PLN, marking a decline from the 254.8 million PLN revenue recorded in H1 2017.See it on page 3
02
The company maintains a strong financial foundation with an equity position exceeding 900 million PLN and high liquidity despite the year-over-year earnings contraction.See it on page 3
03
Financial performance remains heavily reliant on the sustained commercial success of The Witcher 3: Wild Hunt while the company funnels significant capital into the development of Cyberpunk 2077.See it on page 34
04
Strategic expansion efforts included the acquisition of the Wrocław-based studio Strange New Things and the purchase of commercial property in Warsaw to increase long-term production capacity.See it on page 34
05
North America and Europe continue to serve as the primary markets for the company’s digital distribution and export operations.See it on page 43
06
The transition to IFRS 9 and IFRS 15 accounting standards did not require material adjustments to the company’s financial balances or revenue recognition practices for GOG.com and GWENT.See it on page 21

Summary

CD PROJEKT’s financial performance for the first half of 2018 reflects a period of transition characterized by a decline in profitability compared to the same interval in 2017. Net revenues reached 168.4 million PLN, down from 254.8 million PLN in the previous year, resulting in a net profit of approximately 52.4 million PLN. Despite this contraction, the company maintained a robust equity position exceeding 900 million PLN and continued to demonstrate strong liquidity. These results were primarily driven by the sustained commercial success of The Witcher 3: Wild Hunt alongside ongoing development investments in future titles, most notably Cyberpunk 2077.

The scope of these operations remains global, with North America and Europe serving as the primary markets for digital distribution and exports. During this period, the organization prioritized strategic expansion and infrastructure, highlighted by the acquisition of the Wrocław-based studio Strange New Things to bolster development capabilities and the initiation of commercial property purchases in Warsaw. These activities underscore a long-term focus on scaling production capacity despite the temporary dip in year-over-year earnings.

From a regulatory and accounting perspective, the company successfully navigated the transition to updated International Financial Reporting Standards, specifically IFRS 9 and IFRS 15. Assessments of these standards, including the treatment of virtual goods within the GOG.com and GWENT ecosystems, confirmed that the new frameworks did not necessitate material adjustments to financial balances or revenue recognition practices. The organization continues to operate as a going concern, maintaining stable operating costs and adhering to rigorous auditing standards, while managing potential tax risks associated with evolving Polish regulations.