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.


China set to post slowest growth in 28 years in 2018, more stimulus seen

Updated 20 January 2019
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China set to post slowest growth in 28 years in 2018, more stimulus seen

  • Chinese policymakers have pledged more support for the economy this year to reduce the risk of massive job losses
  • China will release its fourth-quarter and 2018 GDP data on Monday

BEIJING: China is expected to report on Monday that economic growth cooled to its slowest in 28 years in 2018 amid weakening domestic demand and bruising US tariffs, adding pressure on Beijing to roll out more support measures to avert a sharper slowdown.
Growing signs of weakness in China — which has generated nearly a third of global growth in the past decade — are stoking worries about risks to the world economy and are weighing on profits for firms ranging from Apple to big carmakers.
Chinese policymakers have pledged more support for the economy this year to reduce the risk of massive job losses, but they have ruled out a “flood” of stimulus like that which Beijing has unleashed in the past, which quickly juiced growth rates but left a mountain of debt.
Analysts polled by Reuters expect the world’s second-largest economy to have grown 6.4 percent in the October-December quarter from a year earlier, slowing from the previous quarter’s 6.5 percent pace and matching levels last seen in early 2009 during the global financial crisis.
That could pull 2018 gross domestic product (GDP) growth to 6.6 percent, the lowest since 1990 and down from a revised 6.8 percent in 2017.
With stimulus measures expected to take some time to kick in, most analysts believe conditions in China are likely to get worse before they get better, and see a further slowdown to 6.3 percent this year. Some analysts believe real growth levels are already much weaker than official data suggest.
Even if China and the US agree on a trade deal in current talks, which is a tall order, analysts said it would be no panacea for the sputtering Chinese economy unless Beijing can galvanize weak investment and consumer demand.
Chen Xingdong, chief China economist at BNP Paribas, said investors should not expect the latest round of stimulus to produce similar results as during the 2008-09 global crisis, when Beijing’s huge spending package quickly boosted growth.
“What China can really do this year is to prevent deflation, prevent a recession and a hard landing in the economy,” Chen said.
On a quarterly basis, growth likely eased to 1.5 percent in Oct-Dec from 1.6 percent in the preceding period.
China will release its fourth-quarter and 2018 GDP data on Monday, along with December factory output, retail sales and fixed-asset investment.
Since China’s quarterly GDP readings tend to be unusually steady, most investors prefer to focus on recent trends.
Surprising contractions in December trade data and factory activity gauges in recent weeks have suggested the economy cooled more quickly than expected at the end of 2018, leaving it on shakier footing at the start of the new year.