Intralot revenue and profit stable in Q1 as currency exchange offsets growth

| By Daniel O'Boyle
Greek lottery business Intralot’s turnover, gross gaming revenue and profit were all almost exactly stable year-on-year in Q1 of 2022, as currency fluctuations offset most of the supplier’s growth.
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Turnover – which is made up of all the revenue Intralot made as a B2B supplier plus all of the money staked with its B2C operation – came to €97.7m. This was almost exactly level with the total recorded in Q1 of 2021.

The business noted that 61.9% of revenue came from lotteries, 18.8% from sports betting, 11.2% from video lottery terminals, 7.7% from IT products and services and 0.5% from racing.

On the B2B side, technology and support services brought in €55.1m, up 1.3%, driven by higher revenue in Australia as lockdowns were eased. Management contract revenue, though, was down by 18.3% to €10.9m. 

This, Intralot said, was almost entirely due to currency exchange impacts in Turkey, which is the largest market for Intralot’s management contract business.

Stakes from B2C operations made up €31.6m of this total, up by 6.1%. This, it said, was partly due to local market growth in Argentina, with the City of Buenos Aires launching its igaming market. Revenue from the country was up by 32.4% to €10.3m. On the other hand, however, revenue from Malta was down by €600,000.

Intralot’s B2C business paid out €17.8m in winnings. As a result, gross gaming revenue from B2C operations was €13.8m, up 23.9%. Overall gross gaming revenue – including the B2B business – was €79.8m, up by 1.2%.

In addition to these €17.8m in winnings, Intralot incurred a further €54.6m in other costs of sales, meaning its total cost of sales was €72.5m, up 0.7%.

When these costs of sales, including winnings, were subtracted from the€97.7m in overall turnover, Intralot’s gross profit was €25.2m, a decline of 1.6%.

The business made €5.7m in other operating income, but also incurred €4.7m in selling expenses and €16.6m in administrative expenses, as well as €417,000 in research and development costs and €305,000 in other operating expenses.

The business noted that €17.4m of these costs were related to depreciation and amortisation, meaning that earnings before interest tax, depreciation and amortisation came to €26.1m, an increase of 4.8%.

Its earnings before interest and tax, meanwhile, came to €8.7m, a 123.1% increase due to lower depreciation and amortisation costs in Q1 of 2021..

Intralot then faced €10.3m in interest and similar expenses and €511,000 in exchange rate losses, which contributed to a loss before tax of €2.3m, 17.9% less than the loss in Q1 of 2021.

After paying €2.6m in tax, up 22.8%, Intralot’s net loss came to €4,945, only €3 away from the loss recorded a year prior.

Intralot chairman and CEO Sokratis P. Kokkalis said that he was pleased with the results which showed continued progress on the supplier’s business plan.

“First quarter results show a consolidation of gains and recovery from the Covid impact and reflect an improved financial profile, with normalised revenues and a reduction in operational expenses and debt servicing costs consistent with the company’s business plan,” he said.

As a result, he added, the business has called a shareholders’ meeting to approve an increase in its share capital.

“On the background of this strongly improved P/L and balance sheet, the company has designed and is about to launch a share capital increase by means of rights issue and has secured the commitment of Sandard General Master Fund II as cornerstone investor for the unsubscribed rights in a move that will significantly strengthen our prospects to grasp the tremendous opportunities in the US and the global markets,” he said.

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