The company, renowned for owning the Tomb Raider franchise, reported a 33% decrease in its adjusted operating profit, amounting to 1.2 billion Swedish crowns (approximately $109.18 million) for the quarter ending in September. This figure fell short of analysts' expectations of 1.8 billion crowns, based on the consensus provided by the company.
CEO Lars Wingefors stated, "We now anticipate lower earnings this year as a result of the postponement of several significant releases in the second half."
Like many other gaming companies, the Swedish firm experienced a surge in demand for video games during the COVID-19 lockdowns but has since faced challenges such as development delays, decreased demand, and unfavorable reception for some of its recent titles.
In recent years, Embracer has started to sell off some of its studios as part of a restructuring initiative aimed at cost reduction and debt management, with plans to split into three publicly traded entities by 2025.
Wingefors confirmed that the planned spin-off of Asmodee, a key division, is still on schedule for this financial year.
Additionally, the company announced the sale of its subsidiary Easybrain for $1.2 billion on Thursday.
According to Stockholm-based broker Redeye, the divestment of Easybrain is a favorable transaction that will significantly lower net debt and enhance the company's financial position.
"This will enable the newly formed companies to pursue growth more effectively, including Asmodee, which was previously anticipated to be separated with a high debt burden," they noted.
J.P. Morgan analysts provided commentary indicating that the valuation of the disposal appears to be within reasonable parameters and is likely to effectively address any residual apprehensions pertaining to leverage.
Upon the commencement of market trading, the company's shares experienced an increase of 8%.