STOCKHOLM (Reuters) – Swedish games group Embracer announced on Tuesday a restructuring programme to slash costs and investments, including in the development of new products, boosting the company’s shares.
Embracer has been hit by development delays, weaker demand, bad reception for some new games and, last month, the fall-through of a large planned strategic partnership.
Shares in the developer, which last year bought several development studios and the intellectual property rights to a new Tomb Raider edition and other games, on Tuesday rose 4% by 0705 GMT.
In a statement the company said it aimed to lower capital expenditure by at least 2.9 billion crowns ($269 million) and cut annual overhead costs by at least 10% or 800 million crowns.
“The figures include capex related to internal and external game development projects and other intangible assets, as well as tangible assets,” it said in a statement.
It repeated an outlook given in May of a full-year operating profit before items affecting comparability of between 7 billion and 9 billion crowns.
The group’s earnings could be hit by one-offs such as potential severance payments and writedowns related to game development projects as part of the restructuring, it said.
($1 = 10.7629 Swedish crowns)
(Reporting by Anna Ringstrom, editing by Terje Solsvik)
