Solid Clouds hf. (First North Iceland: SOLID), the developer of massively multiplayer online (MMO) video games, today announced the results for the first half of the year 2022, ending 30 June.

Key Figures

All figures in ISK m. Comparative figures from last year in parentheses.
 
- Operating loss before depreciation & financial income & expenses -8 (-8)
- Net loss for the period 26.3 (12.8)
- Total assets 1,315.1 (1,336.6)
- Equity ratio 96.8% (97.1%)
- Game revenue 6.7 (10.6)

“We are proud of what the Solid Clouds team has achieved this year in the development of our new game, Starborne Frontiers,” says Stefán Gunnarsson, the Company CEO. “The game is in closed beta testing after only 13 months of development, which is in line with our expectations. Once the Key Performance Indicators (KPIs) in the testing phase have been reached, the marketing effort can start and subsequently the game will be released on multiple markets.”

The Condensed Interim Financial Statements of Solid Clouds for the first half of 2022 were approved by the Company’s Board of Directors and the CEO at a board meeting on 25 August 2022. These cover the period from 1 January to 30 June 2022 and were prepared according to International Financial Reporting Standards (IFRS). They have neither been reviewed nor audited by the Company’s auditors, Deloitte ehf.

First Half 2022 Financial Highlights

Solid Clouds stepped up development (R&D) of Starborne Frontiers in the first half of 2022 in preparation for the beta testing of the game that started at the end of June. Most of Solid Clouds’ expenses arise from R&D spending, which is capitalized and then amortized over its expected lifespan. Capitalized R&D cost amounted to ISK 180.6 m during the first half of 2022, an increase of 75% from the first half of 2021.

The Icelandic state provides tax credits to stimulate research and development. R&D tax credits for the operating year 2021, paid in November, are expected to reach ISK 105.6 m, an increase of 15% from 2020.

Revenues from the Company’s first release, Sovereign Space, amounted to ISK 6.7 m, a drop of 36.7% compared with the first half of 2021. This is because Solid Clouds is currently focusing its resources on the development of its next game, Frontiers.

Operating loss before income tax amounted to ISK 35.5 m, compared to a loss of ISK 32.7 m in the first half of 2021.

Financial Liquidity

As of 30 June 2022, the Company had cash on hand of ISK 384.8 m. The Icelandic Center for Research (Rannís) has indicated to Solid Clouds that the Company will receive ISK 105.6 m in R&D tax credits in November this year, subject to final approval by the Icelandic Tax Authority (RSK). The Company expects that R&D tax credits for the operational year 2022 to be paid in November 2023 will be comparable or higher than the payment this year.

Solid Clouds Financial Statements are available on the Company’s website: https://www.solidclouds.com/investors/docs

Recent Business Highlights

Solid Clouds’ development team achieved several objectives in 1H 2022. The Company was able to reach a major development milestone in December 2021, after seven months of development, when a technical demo of its new game, Frontiers, was hosted for 2,000 testers in Asia.

Solid Clouds reached another major milestone in June 2022, when Starborne Frontiers entered closed beta testing. Testing of this type is conducted with real users in a live environment with all the necessary infrastructure in place. It will produce valuable user feedback and engagement data to improve the game in preparation for its launch.

Brynjólfur Erlingsson joined the board as an alternative member in May 2022. He has deep industry experience regarding the acquisition of new users and analysing their behaviour in online games. Brynjólfur is head of growth of Toca Boca and before that worked for game studios including Mojang, Paradox Interactive, DICE and CCP. He will assist the Solid team with analytics regarding player acquisition and retention.

The Russo-Ukraine war did not impact Solid Clouds materially in the first half of 2022.

Source: Solid Clouds