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OPAP profit spikes in fruitful H1

| By Marese O'Hagan
Half-year results at Greek gambling group OPAP saw an overall year-on-year improvement across the board, with profits up 36.7% from 2022.
OPAP results

Gross gaming revenue (GGR) at OPAP totalled at €1.05bn for the half-year. GGR contribution, along with other levies and duties at €317.2m brought the net gaming revenue to €708.3m, up by 14.9% since 2022.

Earnings before interest, tax, depreciation and amortisation (EBITDA) also improved, rising by 11.5%.

OPAP noted that the improved net gaming revenue and EBITDA reflected “continued organic growth”, which was driven by momentum in OPAP’s online performance and retail segment.

The group also acknowledged that this six-month stretch was uninterrupted by the Covid-19 pandemic.

During the period, OPAP launched OPAPonline.gr, its digital interactive entertainment hub.

Half-year performance by segment

OPAP said its profitability for the half-year was aided by an increase in gaming activity in Cyprus and Greece.

A grand majority of the overall revenue came from operations in Greece, which came to €953.6m. This marked a rise of 14.1%. Revenue generated in Cyprus totalled at €70.8m, up by 12.1%.

Net gaming revenue came to €649.2m in Greece and €59.1m in Cyprus.

Turning to operational segments, online casino revenue was €112.9m, an increase of 35.0% year-on-year. For online betting, revenue rose by 13.7% to €124.1m.

But it was OPAP’s lotteries segment that contributed the highest amount of revenue at €366.3m, an increase of 9.3%. The remaining revenue came from land-based betting at €196.4m, instant and passives at €60.1m and video lottery terminals (VLTs) at €165.4m.

Profit improves 36.7%

Looking at the full breakdown for H1, OPAP recorded €200.4m in agents’ commissions, the highest cost of the half-year period. Other direct costs totalled at €85.2m, while marketing and payroll expenses came to €55.8m and €45.0m respectively.

The remaining expenses came from net impairment, cost of sales from non-gaming activities and other operating expenses. But the expenses were offset slightly by income related to the extension of OPAP’s concession agreement, which was €115.4m, and revenue from non-gaming activities at €52.6m.

This resulted in EBITDA of €374.4m for the period. Depreciation and amortisation came to €64.7m for the six months, bringing the profit to €309.6m. Following finance income of €10.0m and finance costs of €15.1m, the pre-tax profit was €304.6m.

OPAP paid €75.9m in tax, bringing the total profit for the six months to €228.6m, up by 36.7%.

Second quarter revenue

GGR for the second quarter of the year totalled at €498.1m, an increase of 12.6%. Again, OPAP attributed this to its “outperformance” in online gaming throughout the quarter, along with improved performance in its retail segment.

Lottery made the largest contribution to the revenue, totalling at €177.6m. Second to this was betting – consisting of both land-based betting and online betting – at €151.7m. Revenues from VLTs hit €80.9m. The remaining revenue from the quarter was generated by instant and passives and online casino.

“Q2 2023 was another quarter of strong performance for OPAP, marked by solid profitability, the successful implementation of our strategic initiatives and the continuing evolution of our customer proposition,” said Jan Karas, CEO of OPAP. “In online, we successfully launched OPAPonline.gr, our online lottery proposition, and continued to enhance our position across all verticals.

“We are also confident that OPAP is well positioned to meet its financial goals and strategic priorities for the remainder of the year in a sustainable and responsible way for all stakeholders.”

The net gaming revenue for the quarter was €344.8m, after considering €153.2m in GGR contribution and other levies. The net gaming revenue marked an increase of 13.4%.

Among the highest costs for the quarter was €98.2m in agents’ commissions, other operating expenses at €44.1m and other direct costs at €42.0m. After considering expenses and income, the EBITDA was €177.9m, an increase of 6.6% yearly.

Depreciation and amortisation costs, coupled with €7.2m in finance costs and €5.2m in finance income left the pre-tax profit at €143.4m. OPAP paid a total of €35.3m in income tax for the quarter, bringing the profit for the period to €108.0m, up by 39.6%.

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