Asmodee and Dark Horse Comics parent Embracer Group showed a loss on lower sales in its fiscal Q1 (April-June). The Embracer sales decline of 24% was driven by big drops in PC/Console Games (down 34%) and Entertainment & Services (down 54%). Those declines were attributed to tough comps and few new product releases.
Within the Entertainment & Services segment, sales of Dark Horse backlist was noted as a revenue driver, led by volumes of Berserk, and stronger sales of Avatar: The Last Airbender behind the live-action Netflix series and exposure to the material on Webtoon.
Asmodee sales were down 5%, to $292 million (converted from SEK at today’s exchange rate) for the quarter. Sales were pressured by lower performance of distributed games in Central Europe and the UK vs. the year ago quarter, the company explained. Growth was the strongest in the U.S., according to the report. The company noted Star Wars: Unlimited in both its discussion of sales drivers and margin growth.
Asmodee turned an operating profit, an improvement from the year ago quarter. EBIT (earnings before interest and tax) was $1.25 million, a tiny percentage, but at least it was positive, vs. a $6.82 million loss in the year ago quarter.
Despite the modest profit, Asmodee is still generating strong free cash flow by reducing inventory, the company reported.
Company-wide, Embracer Group lost $211 million in the quarter, a big swing from the $216 million profit in the year ago quarter.
The company found reason to be optimistic, and confirmed its planned video game release schedule for the year.
The planned spin-off of Asmodee into a separate publicly traded company (see “Embracer to Spin Off Asmodee“) will be completed by the end of March 2025, the company announced, with the breakup of the remaining entity into two companies by the spin-off of Coffee Stain & Friends to take place before the end of calendar 2025.
Embracer took a big write-off on its Asmodee and Dark Horse acquisitions earlier this year (see “Embracer Writes Down Asmodee and Dark Horse“), and then raised $650 million in new debt financing, replacing a smaller, more expensive credit line (see “Embracer’s New Financing Deal“).
Source: ICv2
