AGTech hit by reduced lottery hardware sales in first quarter

AGTech has cited a decline in the sale of lottery hardware products as the main reason behind a year-on-year decline in revenue during the three months to March 31.

Revenue in the first quarter came in at HK$19.5 million (€2.2 million/US$2.5 million), down 59.9% on the HK$48.5 million posted in the same period last year.

Gross profit dropped from HK$14.9 million to HK$7.1 million, while loss from business operations increased from HK$15.2 million to HK$16.5 million.

However, AGTech did report a drop in total loss for the period, which came in at HK$14.4 million compared to HK$38 million last year.

In addition, total comprehensive income for the first quarter was up from a loss of HK$45.7 million last year to HK$146,000, while profit margin percentage was up from 30.6% to 36.6%.

In a statement, AGTech said: “The decrease in revenue for the three-month period of approximately 59.9% as compared to that for the same period in 2015 was mainly due to reduced sales of lottery hardware products.

“The supply of lottery hardware in the PRC is highly regulated with only a small number of approved suppliers.

“Revenue in this business typically exhibits an irregular pattern since not only are sales not on a commission basis but also the customer base is concentrated and the timing of orders from customers can be variable.

“Thus, while over longer periods of time, orders and revenues tend to be stable, in the short-term volatility can be seen.

“The board does not recommend the payment of an interim dividend for the three-month period.”

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