Paf lowers loss limits further as 2020 revenue slides due to pandemic
Åland Islands-based operator insists it has “completely stopped” making money from high rollers in pursuit of sustainable revenue
Paf has reported revenue of €113m (£97.4m) for 2020, a fall of 1.1% on the €114.2m achieved the previous year, as revenue per customer slipped by 17%.
The result was that operating profit fell more than 33% year-on-year from €26.2m to €17.4m, although €15m was still distributed to good causes.
The 55-year-old company blamed the dip on the pandemic, which caused land and ship revenue to sink by 59% and the shutdown of sports in Q2, as well as self-imposed efforts to reduce income from its biggest customers.
Indeed, it was revealed that customers who lost the most – those in the red category of its traffic light system to categorise customers – plummeted 93% as the business strived shift to more sustainable revenue. Meanwhile, revenue from those players in the green segment (up to €8,000 in losses) rose 14.7%.
As part of the ongoing sustainability drive, Paf also vowed that no customer in 2021 will lose more than €20,000, a decrease on last year’s €25,000. The loss limit had been set at €30,000 in 2019.
CEO Christer Fahlstedt said: “Well aware of the financial impact this has and that our competitors don’t assume responsibility in the same way, we still feel that is a necessary step and something that we a company must be able to deliver on.”
He added: “We believe that long-term, sustainable development is must for our industry. There has to be transparency.”
Overall, Fahlstedt described 2020 as an “extreme year” and that the firm took “painful measures to adapt to the new reality in which we live”.
This included the shedding of 10% of the workforce as the profitability of the business came “under pressure during 2020”. Total headcount fell from 372 to 350, and currently stands at 342.
Despite the hit to its land and ship business last year, which saw revenue tumble from €30.2m to €12.3m, revenue from its digital arm rose from €84.5m in 2019 to €100.4m in 2020.
In February 2020, Paf acquired Mandalorian Technologies, now renamed Paf Multibrand Ltd, which contributed €18.4m to the revenue and helped strengthen Paf’s position in the Swedish market.
Furthermore, the number of customers that contributed to revenue surged 50% from 223,446 in 2019 to 336,206 in 2020, which was a new record for the Åland Islands-headquartered operator.