Asia, Europe Strong for Neteller in Third Quarter

6 November 2007

Neteller released its third-quarter trading update this morning, highlighting strong growth in the group's Asian and European markets despite a pre-tax loss of $145.9 million, due in large part to its multi-million dollar settlement with the U.S. Justice Department (DOJ).

Q3 European revenue rose 19 percent to $8.4 million against figures from Q3 '06, while Asia-Pacific revenue jumped 41 percent to $3 million versus the previous-year period.

Third-quarter revenue across the company, however, was down 75 percent to $16.9 million, as were daily receipts, down 94 percent to $295,000, and daily sign-ups, down 72 percent to 900, compared to last year.

Active customers, excluding North America, were up 14 percent to 94,925 from 83,627 in Q3 '06. As regards regional distribution, European active customers were up 12 percent to 72,849, with Asia-Pacific up 21 percent to 17,638.

Of the $94 million owed its U.S. customers, it said it has returned approximately $78 million. And with regard to the $76 million owed to DOJ, Neteller said it paid $40 million as of Oct. 15, with the remaining balance, $36 million, to be paid on or before Jan. 15, 2008.

As of Sept. 30, cash for the group stood at $149.4 million.

After calling the year "not particularly fun" during last month's EIG, Chief Executive Ron Martin said the results demonstrate the "resilience" of the business, adding, " . . . the results from our European and Asia-Pacific businesses show that we are regaining the trust of customers and delivering innovate solutions to our merchants."

The company said that trading since the end of September showed "positive growth trends."

Chris Krafcik is the editor of IGamingNews. He lives in St. Louis, Mo.