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Norway's Opera warns on growth, says firm may be sold
August 8, 2015 / 2:01 PM / 2 years ago

Norway's Opera warns on growth, says firm may be sold

* Says has interest from a number of parties

* 2015 revenue now forecast lower at $600 mln to $618 mln

* Opera buys Bemobi, a Latam app subscription service

OSLO, Aug 8 (Reuters) - Online advertising and browser firm Opera Sofware is considering a sale of the company after missing second-quarter revenue forecasts and cutting its full-year expectations, the board of the Norwegian company said on Saturday.

The search for a buyer, or other forms of partnership, comes “in response to strategic interest in the company from a number of parties”, and will be aided by bankers at Morgan Stanley International and ABG Sundal Collier, it added in a statement.

The strategic review will be concluded in the second half of 2015.

In a separate announcement, Opera said preliminary numbers showed its second-quarter revenues had grown by 45 percent year-on-year to $146 million, below all forecasts in a Reuters poll of seven analysts, which showed a mean prediction of 51 percent growth.

The firm expected adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of $29 million, while analysts on average had expected earnings of $30.6 million.

The miss was caused by weaker than expected performance in Opera’s mobile advertising business, the firm said.

Opera now expects 2015 revenues of approximately $600 million-$618 million, below a prior guidance of $630 million-$650 million. Analysts in the Reuters poll had forecast revenues of $642 million, up from $481 million in 2014.

The company’s expectations for adjusted full-year EBITDA was cut to a range of $108 million-118 million from $130 million-140 million previously, while analysts on average forecast $124 million.

It was the second time in six months that Opera sharply cut its outlook. In February, the firm’s shares fell by 44 percent in one day following a warning of lower growth.

Simultaneously on Saturday, Opera announced the acquisition of Bemobi, a Latin American subscription service for mobile apps and games, for up to $139.5 million, of which $29.5 million was paid cash and the rest linked to Bemobi’s future financial performance.

“The entire earn-out payment, which is tied to aggressive performance targets will be paid out from actual free cash flow generated from the Bemobi products and services, meaning that the transaction will be self-funded after closing,” it added.

Opera’s shares on Friday closed at 61.1 Norwegian crowns in Oslo, valuing it at 8.89 billion Norwegian crowns ($1.08 billion). ($1 = 8.2694 Norwegian crowns) (Reporting by Terje Solsvik; Editing by Alison Williams)

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