Retail rebound and online growth drive revenue up at OPAP in Q3

| By Robert Fletcher
OPAP said the continuing rebound of its retail operations following the Covid-19 pandemic and ongoing growth within its online gambling business drove year-on-year rises in revenue and net profit in the third quarter.

Like many other operators, OPAP was hit by enforced temporary closures and restrictions on retail betting facilities during the pandemic. However, with almost all measures having now been removed, this has allowed retail to recover.

OPAP also said ongoing growth within its online gambling segment helped the business as a whole in Q3, adding that the impact of the Fifa World Cup, which kicked off last week, will support further growth in the fourth quarter.

“Our Q3 2022 performance was characterised by the continuing retail rebound, as a result of occasional players gradually returning to the game, and the sustained strong growth in online,” OPAP chief executive Jan Karas said. “Additionally, business operations’ normalisation resulted in an improved EBITDA margin, while contributing to OPAP’s solid financial position.

“The benefits emerging from our unique product propositions in both channels and our focus on the continuous upgrade of customer experience showcase the effectiveness of our Fast Forward strategy.

“Among other things, the introduction of new, improved Pame Stoixima retail odds, which are competitive to those of the online market, affirms our ability to execute bold and disruptive decisions, which push boundaries and deliver meaningful results.

“Moreover, during the quarter, we further engaged with our customers and boosted our performance through initiatives like the launch of innovative, augmented reality scratch tickets, the conclusion of the migration to our new OPAP store app, the gamified widgets in online tzoker and casino, and promo campaigns that enhance the position of our portfolio.”

Looking at the results in more detail, gross gaming revenue (GGR) for the three months to the end of September was up 6.1% higher year-on-year at €498.8m (£431.5m/$514.9m), while net gaming revenue also increased 5.0% to €340.0m.

Lottery remained the primary source of revenue for OPAP, generating €180.5m in GGR, up 1.2% on last year, on the back of hefty tzoker performance due to favourable jackpots roll-over assisting also fast games’ demand.

Betting GGR also increased by 10.5% to €156.2m, driven by a busy sports calendar, while instant and passive games GGR climbed 7.9% to €26.0m. However, video lottery terminal GGR slipped 4.1% to €81.0m.

In terms of online casino, GGR in Q3 was 31.4% higher at €55.1m as a result of what OPAP said were “successful product enhancements”.

Looking at costs and while gaming revenue related expenses were 2.1% lower at €135.4m, payroll spending jumped 8.7% to €20.9m and marketing costs increased 31.4% to €23.0m. Other operating costs were 12.4% lower at €35.5m.

As such, earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 12.9% to €197.6m. After including €32.7m in depreciation and amortisation costs, this left an operating profit of €164.9m, up 18.7% year-on-year.

Net finance costs were €8.2m, meaning pre-tax profit was €156.7m, up 21.2% from €129.3m last year. After accounting for €35.3m in income tax payments, OPAP reported a net profit of €121.4m, an increase of 21.6% on last year.

“Looking ahead – and as the much-anticipated, landmark event of World Cup has just kicked off – we believe this encouraging momentum to lead to a strong finish for the year,” Karas said.

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