Embracer stock drops 44% as unannounced partnership falls apart
pcgamesinsider.bizSwedish games giant Embracer Group saw its stock plummet by 44 per cent after the company announced that a strategic partnership had fallen apart.
In its financial report for the year ending March 31st, 2023, the firm revealed that it had been in talks to partner with another party for a deal that would have brought in $2 billion in development revenue over a six-year period, in addition to enabling catch-up payments to help cover costs from in-development projects with large budgets.
Said partnership fell apart the night before Embracer announced its financials. As a result, the firm reduced its forecast for the 2023/24 financial year to be substantially below what the company previously expected. Embracer reckons it'll make between SEK 7 billion (~$650,000) and 9 billion (~$836,000)in adjusted EBIT, down from the SEK 10.3 billion (~$957,000) to-SEK 13.6 billion (~$1.3 billion) anticipated prior.
For the year ending March 31st, the company made SEK 37.7 billion ($3.5 billion) in net sales, a 121 per cent increase. Of that figure, SEK 13.4 billion ($1.3 billion) came from PC and console titles – a 58 per cent increase.
"It has been a challenging year, adversely impacted by game delays, weaker consumer demand and lacklustre reception for certain notable releases," CEO Lars Wingefors (pictured) said.
"Late last night, we were informed that one major strategic partnership that has been negotiated for seven months will not materialize. We now expect to generate SEK 7 to 9 billion in adjusted EBIT with improving cash conversion for FY 2023/24 and a healthy growth outlook in the following years."
Read more on pcgamesinsider.biz
