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Investing.com -- Embracer reported a weaker second quarter as sales and profitability declined sharply, though the company maintained its full-year outlook.
Shares in the Swedish gaming company rose nearly 2% in Stockholm.
Net sales fell 19% to SEK 3.85 billion, with mixed performance across divisions. PC/Console revenue dropped 13%, Mobile plunged 61%, while Entertainment & Services grew 17% .
Adjusted EBIT sank 79% to SEK 109 million, giving a 3% margin versus 11% a year earlier. Free cash flow remained negative at SEK –348 million, although operating cash flow was stable at SEK 405 million.
Adjusted EPS fell to SEK –0.67.
Organic growth reached 6%, supported by stronger performance in Mobile and Entertainment & Services, though PC/Console profitability was weak. The company said its core IPs, including The Lord of the Rings and Kingdom Come: Deliverance, performed ahead of expectations, while new releases such as Killing Floor 3 lagged.
Development spending moderated, with capex at SEK 853 million versus SEK 926 million a year earlier. Net cash stood above SEK 4.2 billion, providing what management called “considerable strategic flexibility.”
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The company said it expects a "somewhat stronger" Q3, driven by seasonality in Entertainment & Services, and a heavier release slate in Q4, including REANIMAL and Gothic 1 Remake.
Embracer’s full-year outlook remained intact.