Greek Betting and Lottery Operator, OPAP, reported a good increased in the profit in the third quarter. The operator registered profit in the Q3 despite a sports betting slowdown. The video lottery terminal (VLT) of the OPAP countered the slowdown and acted as the offset. This ensured OPAP registers profit for the third quarter in 2019, ending on September 30.
As per the data revealed this week, OPAP generated a whopping €393.6mn in the Q3. This is a 6.7% increase from the same period of the last year. The earnings also took a jump as the operator posted €101.6mn, an increase of 16.5% as compared to last year. The net profit registered even better numbers for OPAP. It reached €48.8mn marks taking a sharp rise of 24.5%. It is believed that purging all unnecessarily expenses made it possible to reach to remarkable net profit.
OPAP made it even during the tough phase of sports betting thanks to the Lottery products. The overall share of the overall revenue for Lottery Products dropped by 1.3 points to 50.1% for OPAP in Q3, however, the Lottery Revenue increased by 4.1%. The lottery revenue reached a figure of €197.4mn. The effect of KINO Enhancements made it easy for lottery revenue. The Joker Product which came online a year back also contributed to the lottery revenue. The instant and passives segment, on the other hand, gained 1.8% and posted a good €31.6mn.
As expected the sports betting sharply declined by 5.7% on a year on year basis. It posted only €91.9mn. The overall share on the revenue of this segment also fell by 3.1 points to 23.3%. OPAP said that the third quarter of 2018 had FIFA World Cup and thus the comparison is poor. Also, the attrition of the virtual games is causing the decline.
There is a total of 6616 Playtech powered self-service betting terminal (SSBT) in Greece and Cyprus. The share of the betting revenue for this sector was jumped by 6 points to 19.5% in Q3. The share of live betting revenue was also jumped by nine points to almost 34% in the third quarter.
The VLTs are going to be the driving force of the OPAP as it continues to roll out the features. The revenue also shot up by 43.2% and the company posted €72.8mn. The overall share of the revenue of the VLT was increased by 18.5%. OPAP has 20,932 VLTs in Greece by the end of Q3. If the reports are to be believed then the company is going to install enough VLTs to cross the 4K figure of VLTs in Greece by the next year.
The Marketing Expense of the company was increased by 28.7% in Q3. However, on a year date, it declined by 0.4%. There has been a rise in the payroll for the company. The golden handshakes are considered the major reason behind it. The voluntary redundancy scheme also increased the payroll for this quarter. The other operating costs were declined by 36.7% thanks to the IT-related costs that took a dip. The technology transformation of OPAP has helped in reaching this stage.
OPAP is enjoying a good time. Earlier this month, OPAP took over majority stakes in TCB Holdings after the Hellenic Competition Commission gave its approval. TBC Holdings is the parent company of Stoiximan Group which legally operates in Greece and Cyprus under the same brand. This group works as a Betano brand in Europe as well.
Sazka Group, a Czech based company is also pending for the approval for acquiring OPAP. By October 31st, Sazka has increased the stake in OPAP by addition to 7.25%. This takes the stake of Sazka in OPAP to nearly 40%.