Full year results 2020

OPAP remains in profit despite 32.1% revenue decline in 2020

| By Robert Fletcher
Greek gambling operator OPAP posted a profit of €199.4m (£170.0m/$234.1m) in 2020, despite suffering a 32.1% decline in revenue due to the impact of novel coronavirus (Covid-19) measures.

Revenue for the 12 months to 31 December amounted to €737.3m, down from €1.08bn in the previous year.

OPAP put this down to the impact of Covid-19 restrictions, primarily nationwide lockdowns in Greece and social distancing, with these measures restricting its retail activity in 2020.

Lottery remained its main source of income, despite revenue falling 33.4% to €518.6m due to limitations on retail, with lockdown restrictions in October and November harming performance.

Sports betting revenue also dropped 21.7% to €310.4m, with the cancellation of events earlier in the year having limited players’ options, while video lottery terminal revenue also fell 32.6% to €200.5m and instant and passive 48.2% to €76.3m, both on the back of Covid-19 restrictions.

However, OPAP was slightly helped by the impact of the full consolidation of Kaizen Gaming in the fourth quarter, with revenue from online casino activity reaching €23.9m, the majority of which was generated in Q4.

Turning attention to costs and gaming revenue related expenses were 31.9% lower at €316.1m, with agents’ commission down 33.9% to €255.9m and other costs reduced by 21.5% to €60.2m.

Payroll costs were down 4.5% to €78.6m and marketing expenses 10.0% lower at €54.6m, but other operating expenses edged up 6.8% to €134.2m.

This left €260.3m in earnings before interest, tax, deprecation and amortisation (EBITDA), down 36.9% on the previous year. OPAP benefitted from €142.7m in gain from remeasurement of a previously held equity interest, which meant operating profit reached €250.4m, down 12.2% year-on-year.

After accounting for finance costs, profit before tax was €216.9m, a fall of 19.4% on the previous year, while after paying €17.6m in tax, profit stood at €199.4m, only 1.3% lower than in 2019.

“Looking forward and having successfully preserved our solid financial position and cash reserves, we continue – despite the still prevailing exceptional conditions – to build on what we have already accomplished,” OPAP chief executive Jan Karas said.

“With confidence, we are pursuing the successful execution of OPAP’s new business strategy, the Fast Forward strategy, in order to deliver even better gaming entertainment to our customers.”

OPAP also published its results for the fourth quarter, during which revenue was 48.3% lower at €230.9m, primarily due to the impact of lockdowns in Greece.

However, OPAP also reported a significant fall in certain expenses, with gaming-related revenue costs more than halving to €59.4m and payroll spend down 6.4% to €18.9m.

EBITDA for the fourth quarter was 51.0% lower at €52.7m, but net profit was up 113.7%, due to a €142.7m related to gain from re-measurement of the 36.75% stake held in Kaizen Gaming’s Greek and Cypriot operations.

“Although Q4 was yet another quarter disrupted by Covid-19, with retail closure and restrictions imposed for tackling the pandemic, OPAP has once again demonstrated substantial operational and financial readiness to mitigate the impact, through its diversified portfolio,” Karas said.

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