Keywords Studios interim profit down as cost increases outpace revenue

(Alliance News) - Keywords Studios PLC on Tuesday said it expects to continue to grow faster than the market despite impacts from strikes in the US entertainment industry, as it reported a drop in profit due to ballooning costs.

The Dublin-based provider of technical and creative services for video game production said pretax profit in the first half of 2023 fell 41% to EUR23.2 million from EUR39.1 million a year prior.

Revenue climbed 19% to EUR383.5 million from EUR321.1 million.

Cost of sales however increased 21% to EUR238.3 million from EUR196.6 million. Administrative expenses were 34% higher at EUR115.9 million compared to EUR86.2 million. Financing costs ballooned to EUR6.3 million from EUR2.9 million.

Further, Keywords Studios reported an exchange loss in net investment in foreign operations of EUR4.2 million, compared to a net gain of EUR11.9 million a year prior.

The company declared an interim dividend of 0.85 pence per share, up 10% from 0.77p a year prior.

Looking ahead, Keywords Studios expects to continue to grow faster than the market, while monitoring strikes in the US entertainment industry, which it said had started to impact performance in the second half of 2023.

Chief Executive Officer Bertrand Bodson said: "We are uniquely placed to capture the opportunities that technology advancement creates over time as it constantly increases the bounds of possibility, leading to a proliferation of ever improving content as our clients seek to engage the three billion gamers globally. We are excited about the opportunities that lie ahead and are building for the future whilst we continue to grow market share and deliver against our plans for 2023 and beyond."

Keywords Studios shares fell 12% to 1,300.00 pence each on Tuesday afternoon in London.

By Tom Budszus, Alliance News reporter

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