Gameloft Reports Strong 2006 Year-End Results, 2007 Guidance
Gameloft announced its financial statements for the year ending December 31, 2006 today, with the results revealing a solid increase in sales year-over-year. Operating income would have declined, however, if not for the sale of the company's stake in French website jeuxvideo.com.
Gameloft's total sales increased 46% over 2005, from 46.8 million Euros to 68.4 million Euros. This increase was offset by a significant increase in spending, caused by the company's continued expansion. R&D costs alone grew from 24.9 million Euros in 2005 to 39.4 million Euros in 2006. The company did note that employee growth slowed in the latter half of the year.
"As announced, the Group's current operating margin recorded a very sharp rebound during the last six months of 2006, reaching 11.4% over the second half-year of the period compared to -5.9% over the first half-year. As forecasted, this substantial improvement in operating profitability during the second half of the year is tied to the strong slowdown in the number of employee growth and to the leverage effect on sales," the company's statement noted.
Gameloft's total operating income for 2006 was 19.2 million Euros, enabled by the sale of its jeuxvideo.com interest for 22.9 million Euros. Operating income in 2005 totaled 1.2 million Euros
Gameloft reiterated its 2007 sales forecast of 90-100 million Euros, which would represent another significant year-over-year sales increase. The outlook was justified by the company's increasingly healthy financial position.
"In the second half of 2006, cash flows from operating activities came close to the break even point. This illustrates that the company is in a position to continue to self-finance its strong growth and aim for operating cash flow that is close to the break even point or even positive during fiscal 2007," Gameloft noted.