NETELLER Hurt By UIGEA
By Staff
Isle of Man-based online payment processor NETELLER has released its audited preliminary results for 2007 showing pre-tax losses of $185.7 million after a profit $107 million the year before.

NETELLER was one of the hardest hit following the passage of America’s Unlawful Internet Gambling Enforcement Act (UIGEA) legislation in October of 2006 and paid a $136 million settlement to the US Department of Justice in July over its alleged involvement in online gambling. The firm also revealed related costs of $37 million had also been factored into the dismal results.

NETELLER has now fully withdrew from the American market, a move that has seen its full year group revenues fall to $84 million compared with $257.3 million the year before, but non-US operations brought in $69 million of that total, a 15 percent rise over 2006. European revenue grew 28 percent to $41.7 million while business from the Asia Pacific region was up 44 percent to $11.4 million.

According to the Reuters news service, NETELLER stated that it was recovering now that its operations had been scaled down and revenues from online gambling and other areas of the Internet were growing again.

'I am certainly comfortable with forecasts for 2008 and would expect some upward revisions from analysts,” said Ron Martin, President and Chief Executive Officer for NETELLER.

'We see margins moving significantly north over the next couple of years, the low 60s in 2008 and the mid 60s in 09.'

Margins for 2007 were 56 percent compared with 70 percent the year before with current fees per active customer standing at $124, an eight percent increase on 2006's.

Martin stated that the company hoped to restart dividend payments within a year as analysts calculate more than $130 million could be returned over the coming year.

 
 
 
 
 
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