Gwent drives superb 2Q17 delivery
CD Projekt’s 2Q17 results were very good, in our view. On our assessment, Gwent was responsible for the whole beat vs. both our and the market’s expectations. Gwent’s performance is hidden in two separate segments of CD Projekt, with most in the games development segment and a small part in GOG, so we cannot see how much Gwent generated in 1H17 exactly. However, on our rough estimates, Gwent was responsible for PLN 40.1m of revenue in 2Q17 (PLN 46.4m in 1H17) and roughly PLN 27.6m of net income in 2Q17 (PLN 32.7m in 1H17). This looks very good, but we note that it: 1) includes a milestone payment, which accounts for half of the Gwent revenue in 1H17 (PLN 20m); and ii) the income generated by Gwent comes from revenue minus marketing costs, which means it is slightly too high as, when the game is launched fully, the revenue will be also be reduced by the direct costs of the production of the game.CD Projekt is a holding company of the CD PROJEKT Capital Group which conducts its operations in two activity segments: CD PROJEKT RED and GOG.com. CD PROJEKT RED's activities cover the creation and publication of videogames, licensing the associated distribution rights and manufacturing tie-in products which exploit the commercial appeal of brands owned by Co. The activities of GOG Ltd. involve digital distribution of videogames via Co.'s proprietary GOG.com distribution platform, on the basis of contracts signed by GOG Ltd. with producers, IPR holders and external publishers. The platform enables customers to purchase games, remit payment and download game files to their personal devices.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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