Huuuge expects to maintain high profitability in 2024; announces $70 mln buyback

Huuuge

15/03/2024 06:59

March 15 (Reuters) - Mobile games developer Huuuge Inc
 HUGP.WA  forecast that its earnings might be lower this year
but still at a high level, as it invested in its flagship games,
while it also announced a further share buyback.
    Its adjusted earnings before interest, taxes, depreciation
and amortisation (EBITDA) rose 31.5% to a record $108.2 million
in 2023 on cost-cutting measures, the company said in a
statement late Thursday. It slightly topped the $107 million
analysts' forecast in a consensus published on its website.
    The company, known for its social casino games, announced a
share buyback program for $70 million, at a price of $9.8042 or
38.5 zlotys per share, which represents a premium of 34% to
Wednesday's close.
    It had bought back 20% of its shares for $150 million last
year.
    Warsaw-listed Huuuge said it planned to introduce new
features to its flagship games, "Huuuge Casino" and "Billionaire
Casino" which make up about 96% of revenue, and increase
spending on marketing and user acquisition.
    "Consequently, the adjusted EBITDA and adjusted EBITDA
margin may be lower year-on-year, but still remain at a high
level - profitability continues to be a priority for the
company," it said.
    It said it expected revenue this year to remain similar to
2023, when it came in at $283.4 million, down 11%, as it stopped
development of the "Traffic Puzzle" game and reduced marketing
spend.
    Huuuge has been lowering its user acquisition spend amid
Apple privacy changes. The cost was down 52.1% last year but
rose 3.4% in the fourth quarter.
    The company generates vast majority of revenues by platform
providers, but it had also launched a direct-to-consumer channel
to help improve margins. 
    The channel accounted for about 8% of revenue in the fourth
quarter. Huuuge said it anticipated the direct-to-consumer share
of sales to hit double digit in 2024.
    

 (Reporting by Anna Pruchnicka; Editing by Rashmi Aich)
 ((anna.pruchnicka@thomsonreuters.com; +48 58 769 65 14;))