After a series of financial reforms implemented, OPAP, the Greek lottery and betting operator, saw its earnings corresponding to the third quarter of the year increase by almost a quarter, through the video lottery terminal (VLT) operations with which it achieved offset the decrease in sports betting.
The financial report revealed last week indicates that the revenue generated by OPAP was 393.6 million euros in the quarter ending September 30. This means 6.7% more than what was registered in 2018 during the same period.
However, the increase in earnings amounted to 16.5% to 101.6 million euros, while net earnings registered a significant increase from 24.5% to 48.8 million euros. The favorable results of the company were mainly due to the reforms implemented to cut all unnecessary expenses.
Lottery products remain the main source of revenue for the company, despite the drop of 1.3 points to 50.1% of the share of this segment in general revenues during the third quarter.
OPAP recorded a 4.1% increase to 197.4 million euros in lottery revenues due to the “lasting positive effect of KINO improvements.” Also to the improvement in the presentation of Joker, another of its products that was launched online this year. Earnings in the Instant and Passive segment were 1.8% to 31.6 million euros.
In the sports betting segment, the results were not encouraging. Revenue fell 5.7% year-over-year to 91.9 million euros, reducing its share of general revenues to 3.1 points (23.3%).
OPAP attributes these results to a bad comparison with the third quarter of last year, in which the FIFA World Cup was presented in the last stages and to the “natural wear and tear of virtual games.”
As of September 30, the company had 6,616 self-service betting terminals (SSBT) based in Playtech technology installed in Greece and Cyprus. In the third quarter, the participation of SSBT in betting revenues saw an increase of about 6 points year-on-year to 19.5%. While there was an increase of 9 points close to 34% of the participation of SSBT in live betting revenue.
The company’s constant deployment of new VLTs is OPAP’s most important financial factor, since there was a dizzying increase in revenue from 43.2% to 72.8 million euros, which resulted in a considerable increase in VLT’s share in the company’s general revenue at almost 5 points to 18.5%. By the end of the third quarter, there were 20,932 VLT installed in Greece, but it is expected that by the end of the year that figure will have increased to some 4,000 more installed units.
Although marketing costs in the third quarter had an increase of 28.7%, however, during the year they decreased 0.4%. In addition, personnel expenses increased fundamentally with the voluntary dismissal system that was implemented, so that these expenses will decrease.
Likewise, OPAP’s financial report records the decrease of one fifth in other operating expenses due to a 36.7% drop in costs related to information technologies, after the company’s “technological transformation” process was completed.
The Hellenic Competition Commission in early November approved that OPAP has a majority stake in TCB Holdings. TCB is the parent company of the Stoiximan Group, which operates in line with its own brand in Greece and Cyprus; and in other markets in Europe it does so with its Betano brand. The purchase of shares however must first be endorsed by the Cyprus authorities.
Regarding the acquisition of OPAP by the Czech operator Sazka Group that is pending, the company said Sazka increased its stake in OPAP by 7.25% as of October 31. So Sazka has a stake in OPAP close to 40%.