G5 Entertainment AB: Interim report January-June 2014

Regulatory News:

April-June 2014

·Consolidated revenue for the period is 40 635 (21 822) kSEK, an increase of 86% compared to the same period 2013.
·Operating result for the period is 2 353 (3 387) kSEK. Excluding re-listing expenses the operating result was 3 492 kSEK.
·Net result for the period is 1 740 (3 241) kSEK.
·Earnings per share for the period before and after dilution is 0.20 (0.37) SEK.
·Cash flow before financing activities during the period is -9 365 (-5 314) kSEK. This includes a tax payment for which a refund in excess of 4 MSEK is expected during the third quarter, and fees in excess of 1 MSEK to advisors in connection with the listing on NASDAQ OMX Stockholm.

January-June 2014

·Consolidated revenue for the period is 79 746 (49 379) kSEK, an increase of 61% compared to the same period 2013.
·Operating result for the period is 7 509 (12 817) kSEK. Excluding re-listing expenses the operating result is 8 918 kSEK.
· Net result for the period is 5 768 (11 230) kSEK.
· Earnings per share for the period before and after dilution is 0.66 (1.32) SEK.
· Cash flow before financing activities during the period is -2 178 (-8 339) kSEK. This includes a tax payment for which a refund in excess of 4 MSEK is expected during the third quarter, and fees in excess of 1 MSEK to advisors in connection with the listing on NASDAQ OMX Stockholm.

Important events during the second quarter

· On June 10, the shares of G5 Entertainment AB (short name: G5EN), a small cap company within the technology sector, started trading on the main market of NASDAQ OMX Stockholm.
· G5 has during the quarter shown substantial and profitable growth, and generated record monthly and quarterly revenue.
· Revenue from free-to-play games grew 202% compared to 13Q2, and accounted for 71% of total revenue in 14Q2 (43% in 13Q2).
· Revenue from unlockable games was slightly lower than in 14Q1 but seems to have stabilized.
· The accumulated number of downloads of the group’s games (not counting updates) surpassed 170 million.
· The group continued working on improving free-to-play games in its portfolio and working on new free-to-play games.

Important events after the end of the period

· The management is growing increasingly confident that going forward seasonality is not going to affect the revenue as much as it did in previous years. The group’s increased marketing spending allows balancing the inflow of new users during the "low” season in the application stores.
· The company continued to work on upcoming new free-to-play games, with the aim to have more than 10 free-to-play games in the portfolio before the end of 2014. Most of new games that are scheduled to come out before the end of the year are owned by G5 and developed either internally or by 3rd party studios under work-for-hire contracts.
· The group’s office in Kharkov continues business as usual. It is the group's policy to keep critical code and materials backed up outside Ukraine, keep intellectual property rights in EU entities, and transfer funds to subsidiaries on as-needed basis.

The G5 Entertainment group is a developer and publisher of high quality downloadable casual games for iPhone, iPad, Android, Mac, and Windows 8. G5 Entertainment’s portfolio includes popular casual games like The Secret Society, Virtual City Playground, Supermarket Mania, Special Enquiry Detail, Stand O’Food, and Mahjongg Artifacts. G5 Entertainment AB is listed on Nasdaq OMX Stockholm since 2014.

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