The company released the financial results for Q4 and the full fiscal year 2022 reporting growth in net sales and operating profit, although it recorded an expected decline in the gaming sector.
Embracer Group has recently released its financial results for the fourth quarter of 2022 as well as for the full fiscal year ended March 31, 2022. Generally, the company showed good results, reporting net sales growth and an increase in operating profit.
In the fourth quarter, the holding's total net sales reached SEK 5.2 billion ($527 million), an increase of 117% compared to the same period in the previous year. The gaming sector's net sales saw a 128% growth and amounted to SEK 4.4 billion ($446 million). Operating profit increased by 17% to approximately SEK 1 billion (nearly $101 million).
The full-year net sales also saw a growth of 89% reaching SEK 17 billion ($1.7 billion), and the gaming segment's sales increased by 116% to SEK 13.9 billion ($1.4 billion). Operating profit in FY2022 was SEK 4.4 billion ($446 million), up 54% compared to the previous year.
The company, however, recorded an expected decline in the gaming sector. Organic growth in constant currency in Q4 2022 was 34% lower than in Q4 2021, and the full-year growth was 7% lower compared to FY2021. The company attributed that to increased investment in development projects, the major part of which has not been released yet and, consequently, hasn't been paid off yet.
The holding reported that games like Metro Exodus, Spongebob Squarepants: Battle for Bikini Bottom Re-Hydrated, Wreckfest, Biomutant, Deep Rock Galactic, Valheim, Satisfactory, and Goat Simulator continue to sell, but the release of ELEX 2 did not meet the company's expectations. However, Embracer expects to reach profitability over time.
Embracer added that during this fiscal year it is set to release games and add-on content with a total investment of at least three times that of content released during the previous fiscal year. In total, the holding has 223 games in development, including more than 25 AAA titles that will be released before March 2026.
The company emphasized that it sees potential not only in the sequels of games from Eidos, Crystal Dynamics, and Square Enix Montreal but also in their remakes, remasters, and spin-offs. The deal to purchase the studios from Square Enix is due to close between July and September 2022.
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