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Retail closures push revenue down 46.9% at OPAP in Q1 despite record online figures

| By Robert Fletcher
Greek gambling operator OPAP posted a 46.9% year-on-year decline in revenue to €174.2m (£150.3m/$212.3m) during the first quarter of its 2021 financial year, despite experiencing a record performance within its online gambling operations.
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Overall gross gaming revenue for the three months to 31 March was down from €328.3m in Q1 of last year, primarily due to OPAP’s retail operations remaining closed throughout Q1 of this year, in line with novel coronavirus (Covid-19) restrictions in Greece. Retail stores did not begin to reopen until 12 April.

As such, lottery revenue fell by 76.3% from €154.5m to €36.6m, while instant and passives revenue was also down 59.0% to €7.9m as a result of Covid-19 lockdown and other mobility restrictions.

The operator did not generate any revenue from video lottery terminals (VLTs) in Q1 due to stores having been closed since early November last year, though such facilities are due to reopen from 24 May.

Sports betting revenue was also down 6.4% to €82.4m, but OPAP said that this segment saw a significant rise in online activity, with online betting accounting for €70.0m of revenue in Q1, compared to €12.0m from retail. OPAP said this was helped by the full integration of the Kaizen Gaming business in Q4 of last year.

Turning to online casino and revenue here reached a record €47.3m, the highest quarterly total since OPAP launched the offering in the second quarter of 2020. This, it said, was also helped by the Kaizen Gaming integration.

“In the first quarter of the year, online demonstrated a record quarter achieving remarkable growth, while on the retail front, revenues were expectedly affected by the lockdown and stores’ closure across our networks,” said Jan Karas, who was appointed permanent chief executive of OPAP at the end of 2020 after a spell as interim CEO.

“We are excited with both the OPAP stores re-opening on 12 April as well as the imminent VLTs activity restart. Performance wise the early signs are particularly encouraging for retail while at the same time our online business remains strong.”

Looking at spending in Q1, total operating expenses were up 31.9% to €76.1m, mainly due to €22.8m in additional costs associated with the Kaizen Gaming integration, which pushed other expenses up 65.0% to €41.4m.

This meant earnings before interest, tax, depreciation and amortisation (EBITDA) fell 29.1% to €61.3m, while after accounting for €33.3m in depreciation and amortisation expenses, operating profit was down 52.6% to €28.1m.

OPAP reported €377,000 in financial income, as well as €11.4m in finance costs, resulting in a profit before tax of €17.1m, down 65.0% year-on-year. The operator paid €6.0m in income tax, leaving a total profit for the period of €11.1m, a drop of 67.2% on 2020.

“Going forward, we remain committed to provide prime services to the clients across all channels setting the ground to offer a top class customer experience in the forthcoming large betting events like the Uefa Euro 2020,” Karas said.  

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