Interim Report: January–March 2020

Key insights

6 takeaways

01
Enad Global 7 reported a 951% surge in net revenue to 155.5 million SEK for Q1 2020, driven by an aggressive acquisition-led growth strategy.See it on page 4
02
The company incurred a net loss of 31.4 million SEK and an EBIT of -11.1 million SEK, primarily due to high financing costs from recent acquisitions.See it on page 7
03
Liquidity tightened significantly during the quarter, with cash flow at -15.4 million SEK and a total cash balance of 10.4 million SEK as of March 31, 2020.See it on page 23
04
The firm expanded its portfolio through the integration of Antimatter Games and Sold Out to strengthen its position in the global PC and console markets.See it on page 10
05
Management is prioritizing long-term market positioning over immediate profitability, supported by a development pipeline of over 20 projects scheduled for release through 2022.See it on page 5
06
Despite minor project delays caused by the onset of the COVID-19 pandemic, the company maintains its long-term development roadmap.See it on page 5

Summary

Enad Global 7 experienced a period of aggressive expansion during the first quarter of 2020, characterized by a 951 percent surge in net revenue to 155.5 million SEK compared to the previous year. This substantial growth stems from a diversified business model that integrates game development, marketing, and publishing services. By prioritizing an acquisition-heavy strategy, the company has successfully expanded its portfolio through the integration of entities such as Antimatter Games and Sold Out. These efforts are designed to establish the firm as a prominent developer and publisher within the global PC and console gaming markets, supported by a robust pipeline of over 20 projects scheduled for release through 2022.

Despite this rapid top-line growth, the company faced significant financial headwinds during the quarter, reporting an EBIT of -11.1 million SEK and a net loss of 31.4 million SEK. These negative results are primarily attributed to the substantial financing costs associated with recent strategic acquisitions. Furthermore, the firm’s liquidity position tightened during this period, with cash flow reaching -15.4 million SEK and the total cash balance declining to 10.4 million SEK. Equity also saw a reduction, settling at 244.2 million SEK by the end of March 2020.

Management maintains a confident outlook regarding the company’s long-term trajectory, emphasizing resource efficiency and digital distribution as core pillars of its operational success. While minor project delays emerged due to the onset of the COVID-19 pandemic, the organization remains committed to its development roadmap. The current financial performance reflects a deliberate trade-off, prioritizing long-term market positioning and infrastructure development over immediate profitability as the company scales its operations to meet future demand.