EBITDA ticks up while revenue falters in Intralot H1

Earnings before interest, tax, depreciation and amortisation (EBITDA) at Intralot grew 14.0% to €62.8m (£53.8m/$68.3m) during the first six months of the year.

However, revenue fell 2.9% year-on-year to €163.6m, while turnover for the period totalled at €175.3m, down 14.4%.

The turnover consists of the B2B revenue made from Intralot’s supplier business, along with stakes wagered by players through its B2C operator business.

After considering the €163.6m in revenue, Intralot then added €123.5m in technology and support services, €29.8m in management contracts and €22.0m in licensed operations to make up the turnover.

Cash flow for the six months improved by 20.2%, reaching €49.8m, which Intralot attributed to the improved EBITDA performance.

Looking at “significant opportunities” worldwide

Sokratis P Kokkalis, chairman and CEO of Intralot, said that the EBITDA and cash flow would aid Intralot in its expansion efforts in the US and beyond.

“Intralot’s results for the first half of 2023 show continuing EBITDA growth of 14.0% and healthy cash flows as the company consistently focuses on higher profit margin activities and lower leverage ratios,” remarked Kokkalis.

“These developments allow us greater confidence in refinancing our upcoming maturities with an improved credit profile and address significant opportunities in the US and around the globe.”

During the half-year, Intralot signed a number of significant deals. These included a deal to provide the British Columbia Lottery Corporation (BCLC) with its Intralot Orion sports betting platform, as well as a long-term lottery deal with the Taiwan Public Welfare Lottery.

Cost of sales fall but EBIT improves

Looking at the turnover for the six months, most of the total was derived from Intralot’s operations in the Americas, which totalled at €114.8m. Europe contributed €50.7m, while €39.4m was attributed to “other” revenue. Eliminations resulted in €21.7m being removed from the turnover.

Lottery games were the largest contributor to the turnover, accounting for 58.7% of the total. Sports betting was the second highest contributor at 17.6%, followed by video lottery terminals at 12.7%.

Cost of sales was €112.3m for the half-year, a decline of 24.3% year-on-year. This brought the gross profit up by 11.8% to €62.9m.

Other operating income came to €14.7m. But administrative expenses at €36.4m offset this contribution. Following selling expenses at €9.1m, research and development expenses at €615,000 and other operating expenses at €512,000, the total earnings before interest and tax (EBIT) for the half-year was €30.9m. This was a rise of 69.6% yearly.

Profit up for H1

But this was affected by interest and similar expenses at €20.8m, as well as €129,000 in losses from asset disposal and €369,000 in exchange differences.

After considering various other costs, including €1.1m in income from investments, €1.7m in interest income and €3.7m in net monetary profit, the pre-tax profit for the six months was €16.3m.

Following €7.1m in tax, the net profit was €9.1m for H1, a rise of €8.8m year-on-year.

Second quarter

Turning to Intralot’s second quarter results, turnover was €85.8m, down by 20.0%. Intralot attributed this to the continuing effects of the expiration of its licence in Malta in July 2022.

Revenue totalled at €80.2m, down by 9.6%.

Cost of sales totalled at €55.4m for the quarter, posting a 27.1% decrease from Q2 2022. This left the gross profit for the quarter at €30.3m, down by 2.3% year-on-year.

Other operating income totalled at €6.9m. Administrative expenses came to €19.0m, while selling expenses were €4.3m. Other operating expenses were €413,000 and research and development expenses were €264,000.

This brought the EBIT for the quarter to €13.3m, a rise of 39.1%.

Further costs were made up of €10.1m in interest and similar expenses and €38,000 in losses from assets disposal. Following further income, including €1.1m in net monetary position, the pre-tax profit for the quarter was €5.3m.

Following €2.1m in tax, the total profit for the quarter was €3.2m, a fall of 69.4%.