Stoiximan consolidation helps push Sazka’s revenue and profit up in Q3
Gross gaming revenue (GGR) for the three months through to 30 September hiked 14.0% to a record €876.2m.
Breaking down its performance, numerical lotteries remained Sazka’s core area, bringing in €371.1m in GGR, down 1.4% on last year.
Video lottery terminal and casino GGR climbed 13.1% to €194.6m and sports betting 32.4% to €148.5m, while igaming GGR more than doubled to €101.5m. The remaining €60.5m in GGR came from instant lotteries, slightly down on €61.3m last year.
In terms of geographical performance, the majority of GGR came from Greece and Cyprus, with GGR across the two markets rising 20.3% to €470.4m. This was mainly due to Sazka’s OPAP subsidiary in November last year increasing its stake in Stoiximan operations in the countries to 84.48%.
Austrian GGR edged up 2.0% year-on-year to €309.1m, while GGR from the Czech Republic also increased by 28.7% to €96.4m.
After accounting for gaming taxes, net gaming revenue amounted to €541.0m (£462.1m/$612.1m), up 18.7% from €455.8m in the same period last year,
Looking at costs, expenses were up across all areas with the exception of personnel, where spending was down 3.6% to €79.9m. Agent commission fees amounted to €123.7m, materials, consumables and services €119.4m, marketing €46.4m, and other operating costs €28.7m.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was up by 40.0% to €285.1m. After accounting for €54.7m in depreciation and amortisation costs, as well as €100,000 related to the impairment of non-financial assets and €30.1m in financial costs, pre-tax profit was €197.5m, up 182.1% year-on-year.
Sazka paid €46.0m in tax during the quarter, leaving a net profit of €151.1m, an increase of 190.8% on €52.1m at the same point in 2020.
“The third quarter was the first quarter in 2021 when all our businesses operated without material Covid-19 related restrictions,” Sazka chief executive Robert Chvatal said. “Our physical retail businesses in Greece and Cyprus and casinos in Austria and internationally, which were adversely impacted by restrictions in H1, demonstrated a very rapid recovery, in line with our expectations.
“I am especially pleased about a significant improvement in profitability levels in our Austrian business following the successful execution of our restructuring program, which is expected to deliver annual savings of €45m.”
Looking at the year to date, net gaming revenue in the nine months to 30 September was 43.9% higher at €1.27bn, while GGR also hiked 50.8% year-on-year to €2.14bn.
Pre-tax profit for the period was 223.0% up to €406.0m, while after paying €81.1m in tax, this resulted in a net profit of €324.9m, an increase of 245.3% from €94.1m last year.
“While governments have introduced some new restrictions after the end of the period, these are much more limited than in previous periods and have in the case of Austria already been relaxed again,” Chvatal said.
“We remain optimistic about the outlook for Q4, supported by strong trading in most of our businesses and in the online channel.
“Overall, I am very pleased with Sazka Group’s continuing strong performance in Q3 2021 and I look forward with confidence and excitement to a great fourth quarter and 2022 as our strong trading momentum persists and we continue to make progress on our strategic objectives.”
Publication of the results comes after Sazka Entertainment, the parent company of Sazka Group, last week announced that it was rebrand its entire business as Allwyn with immediate effect.
The operator said the new name reflects its evolution from a pan-European lottery operator into a global business. The brand will be extended across the whole business, though its individual brands will be retained and continue to operate without any changes.
Sazka in April announced it was to bring together its UK operations under the new Allwyn corporate identity as it bids for the market’s latest National Lottery licence.