Rovio Entertainment (ROVIO) is the creator of the Angry Birds video game. He warned that profitability would fall short of expectations, causing the Finnish company’s share price to halve and investors to lose a lot of money following its floatation in September.
Rovio attributed the worsening prognosis to higher marketing expenses and other initiatives. By 1540 GMT, its shares had fallen 49.7% to 4.9 euros, well below the IPO price of 11.50 euros.
“That guidance is nowhere near the growth they previously talked about,” remarked an anonymous fund manager who owns Rovio stock.
It was the latest disappointment for investors, following a 20% plunge in the stock following Rovio’s first interim report as a publicly traded firm in November.
Rovio forecasted an operating profit of 9-11 percent in 2018, up from 10.6 percent last year, and revenues of 260-300 million euros, up from 297 million last years.
According to Thomson Reuters statistics, these figures were below analysts’ expectations of a profit of 14.5 percent and revenues of 336 million euros.
The company reiterated its long-term targets of a 30% profit margin and gaming revenue expanding faster than the Western market on a conference call with investors, but provided little details on how to achieve them.
“That still holds true, and we stand by it…we believe that 30 percent EBIT is attainable in the long run,” Rovio CEO Kati Levoranta stated.
“We see it occurring with our colleagues in the market, and we believe we are in a good position to do the same in the long run.”
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