Revenue for the 12 months to 31 December 2020 amounted to €113.0m (£97.1m/$127.6m), down 1.1% from €114.2m in the previous year.
Paf’s internet business was by far its primary source of income in 2020 with the €100.4m generated from this segment being 18.8% higher than in 2019.
The operator said this was due to its acquisition of Mandalorian Technologies in February 2020, with this business, now renamed Paf Multibrand, contributing €18.4m in online revenue.
Paf noted strong development across its bingo, slots and live casino products in 2020, but declines in sports betting, due to the number of sports events that were cancelled as a result of the novel coronavirus (Covid-19) pandemic.
Despite this growth, Paf said its decision to introduce lower loss limits for online players had an impact on internet revenue. The loss limit in 2020 was €25,000 per customer, down from €30,000 in 2019, though this has since been cut again to €20,000 for 2021. As such, average revenue per online customer decreased by 17% in 2020.
The number of customers gambling online increased to 336,206, a new record for Paf, while the operator anticipates that this figure will continue to climb during 2021 through effective marketing and continued development of its platform.
Turning to its land-based and ship business, revenue dropped 59.3% to €12.3m due to a sharp decline in customer activity as a result of the pandemic. However, Paf did note that average revenue per passenger onboard ships was higher in 2020 than the previous year.
Other operating income rocketed 1,075.0% to €4.7m due to external sales of gambling platforms and associated services.
“Covid-19 has had an extremely negative impact on land and ship and resulted in reduced revenues by as much as 59%,” Paf chief executive Christer Fahlstdet said.
“There are also major changes in the Internet segment, where both Paf’s self-imposed work to reduce the revenue from the biggest players has had a major effect and the restrictions introduced in various markets as a result of Covid-19 during the year have had a large impact.
“However, these effects are to some extent offset by the acquisition of the Swedish-licensed operator No Account Casino, which was completed during the first quarter of 2020. An acquisition that, despite Covid-19, has turned out very well and has largely compensated for the reduction in revenue in other markets.”
Looking at spending in 2020 and staff costs were up 4.7% to €26.8m, while depreciation and amortisation jumped 84.8% to €10.9m and other operating costs increased 14.6% year-on-year to €37.0m.
This left an operating profit of €17.4m, down 33.6% from €26.2m in the previous year. After taking into account financial costs totalling €63,188, profit before tax was €17.4m, a drop of 33.3% on 2019.
Paf paid €92,931 in income tax and €576,714 in deferred taxes, leaving a profit for the year of €16.7m, down 34.8% from €25.6m in the previous year.
“Our world is undergoing major changes, but in 2020 Paf was quite successful in maintaining the same pace in our own development,” Fahlstdet said. “There is no indication that the challenges and pace of change will abate.
“Constant change – whether we like it or not – is the new reality and something we as a company must continue to be open to.”
Alongside its financial results, Paf also published further details of player spending, as part of its ongoing commitment to responsible gambling, including the recent lowering of loss limits for online gambling.
Across the Paf and Paf Multibrand businesses in 2020, loss limit restrictions meant that no players registered losses in excess of €30,000 online. In 2019, 0.05% of customers were in this category, compared to 0.13% in 2018 and 0.21% in 2017.
Some 0.28% of online users registered losses of between €15,001 and €30,000, down from 0.43% in 2019, while 0.69% of customers lost between €8,001 and €15,000 playing online with Paf and Paf Multibrand.
The vast majority of online users – 72.9% – recorded losses of under €8,000, up from 70.8% in 2019, while 26.1% of customers ended the year with winnings, down from 27.8% in the previous year.
In terms of revenue from these customer groups, Paf reported €219,812 from players with losses in excess of €30,000, down from €6.1m in 2019.
Revenue from players with losses between €15,001 and €30,000 was €18.3m, compared to €26.2m in the previous year, and revenue from the €8,001 to €15,000 loss category fell from €28.9m to €24.8m.
Some €120.7m was drawn from players with losses of under €8,000, up from €104.5m in 2019, while Paf and Paf Multibrand paid out €42.4m in net winnings to players who won more than they lost.
“Our principle of openness is easy to understand for everyone,” Fahlstedt said. “Do our customers play for large sums of money or do they play at a more sustainable level?
“We could, of course, choose to wait a few more years so we get a common scientifically-based table that all gaming companies can agree on before openly showing our numbers. Or we do something right now.”