AGTech announced a 3.5 million increase in revenue in the third quarter to HKD$70.3 m (£ 7.0m/€8.1m/$9.0 m), but fair value adjustments due to the supplier’s 2014 acquisition of lottery hardware company Score Price balanced lower operating costs, resulting in a reduction in income over the span.
Lottery equipment made up $49.7 m of AGTech’s sales of $70.3 m, rising 4.2 million year-on-year. Lottery players and services make up an additional $11.8 m, 1.7% more than in 2018.
Lottery delivery and ancillary services received an estimated $5.1 m, down 12.5 million from 2018. Gaming and media sales totaled $3.7 million, a rise of 31 percent year-on-year.
Employee benefit costs were the largest cost for AGTech at $46.8 m, although this amount was down year-on-year by 24.4 million. The cost of buying and adjusting the stock has decreased to $28.8 million. Certain operating expenses fell to $18.8 m by 28.8 percent.
Depreciation charges for right-of-use properties totaled $5.2 million, while those investments fell to $605,000 for land and facilities. Other losses also declined rapidly to $2.8 m, down 85.2%.
Such drastically reduced expenses helped to reduce the operating loss of AGTech’s Q3, which plummeted by 58.8% to $30.8 million, down 58.8%.
Nevertheless, AGTech’s profits from convertible to equity or cash bond value changes fell 44.7 million to $76.5 m. It said these bonds were related to purchasing Score Quality, a portable lottery equipment maker. Gains from reductions in the market value of items owed by AGTech to Score Value’s former owners took in another $6.1 million, down 51.4%.
Price adjustments to businesses where AGTech owns a non-controlling stake rose to $16.8 million more than six fold.
Nevertheless, financial income rose 45.3 percent to $8.6 million, contributing to a $43.5 million pre-tax gain, down 44.9 percent year-on-year.
AGTech reported a total profit of $43.0 million after charging $502,000 in revenue, down 44.3 percent.