Angry Birds maker Rovio gains ground as profits rise

Rovio expects a movie sequel to boost business next year. (AFP)
Updated 17 May 2018
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Angry Birds maker Rovio gains ground as profits rise

HELSINKI: Rovio Entertainment, the maker of the “Angry Birds” mobile games and movie, posted better than expected quarterly profit on Thursday, representing a fillip to investor confidence dented by a dramatic profit warning in February.
The Finnish company’s recent troubles have stemmed from tough competition and increased user-acquisition costs, as well as high dependency on the Angry Birds brand that was first launched as a mobile game in 2009.
However, adjusted operating profit in the first quarter of 2018 roughly doubled year on year to €10 million, with Rovio citing growth in its top games and lower marketing costs.
Sales, meanwhile, were down 1 percent at €66 million on declining revenue from its 2016 Hollywood movie.
Shares in Rovio, which listed last September, rose 5.6 percent on the news, recovering a some of the 50 percent decline after the February profit warning.
“Quarterly projections are difficult for the gaming companies as costs may fluctuate significantly between quarters,” said OP Bank analyst Hannu Rauhala, who has a “buy” rating on the stock.
“But the report nevertheless shows some stability in their performance, which strengthens confidence.”
Rovio reiterated the full-year outlook that had disappointed investors in February, when it said that sales could fall this year after jumping 55 percent in 2017.
In the past months Rovio has announced the departures of its head of games and its investor relations chief while cutting the pay of its chairman and vice chairman.
Rovio expects a movie sequel to boost business next year and the company has also stepped up investments in its spin-off company Hatch, which is building a Netflix-style streaming service for mobile games.


Jordanian cabinet approves new IMF-guided tax law to boost finances

Updated 21 May 2018
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Jordanian cabinet approves new IMF-guided tax law to boost finances

AMMAN: Jordan’s cabinet on Monday approved major IMF-guided proposals that aim to double the income tax base, as a key part of reforms to boost the finances of a debt-burdened economy hit by regional conflict.
“When only 4 percent of Jordanians pay (personal) income tax, this may not be the right thing,” Finance Minister Omar Malhas said in remarks after the cabinet meeting, adding the goal was to push that to eight percent. The draft legislation was submitted to parliament.
The IMF’s three-year Extended Fund Facility program aims to generate more state revenue to gradually bring down public debt to 77 percent of GDP in 2021, from a record 95 percent.
A few months ago Jordan raised levies on hundreds of food and consumer items by unifying general sales tax (GST) to 16 percent — removing exemptions on many basic goods.
In January subsidies on bread were ended, doubling some prices in a country with rising unemployment and poverty among its eight million people.
The income tax move and the GST reforms will bring an estimated 840 million dinars ($1.2 billion) in extra annual tax revenue that will help reduce chronic budget shortfalls normally covered by foreign aid, officials say.
Corporate income tax on banks, financial institutions and insurance companies will be pushed to 40 percent from 30 percent. Taxes on Jordan’s phosphate and potash mining industry will be raised to 30 percent from 24.
The government argues the reforms will reduce social disparities by progressively taxing high earners while leaving low-paid public sector employees largely untouched.
“This is a fair tax law not an unfair one,” said Malhas, who shrugged off criticism the law is lenient on many businesses connected to politicians whose transactions are not subject to tax scrutiny.
Husam Abu Ali, the head of the Income and Sales Tax Department, said a proposed IMF-recommended Financial Crime Investigations Unit will stiffen penalties for tax evaders. Critics say it will not tackle pervasive corruption in state institutions.
Abu Ali said the government could be losing hundreds of millions of dollars through tax evasion, which is as high as 80 percent in some companies.
The amendments lower the income tax threshold and raise tax rates. Unions said the government was caving in to IMF demands and squeezing more from the same taxpayers.
“It is penalizing a group that has long paid what it owes the state,” the unions syndicate said in a statement.
“It imposes injustice on employees whose salaries have barely coped with price hikes rising madly in recent years.”