Intralot Reports Third-Quarter Earnings Surge

Intralot, a Greek provider of gambling solutions, reported that its earnings rose in the period ending September 30, 2021. This increase was mainly attributed to the gradual recovery from COVID-19 restrictions in key areas.

Intralot’s earnings climbed by 8.2% year-over-year to €100.2 million. This included both wagering amounts from B2C offerings and income from supplier agreements.

The company attributed this rise to substantial growth in the US market and enhanced contributions from Croatia following the activation of a new agreement there. Furthermore, the company observed indications of business recovery from the pandemic in other significant markets.

The primary source of this total revenue was technology supply contracts, accounting for €56.2 million. Another €33.2 million came from licensed B2C operations. Game management agreements accounted for the remaining €10.3 million in revenue.

After paying out player winnings for the licensed operations, the gross gambling revenue for that segment was €12.6 million. Adding this to the €67.9 million from B2B contracts, the group’s total revenue reached €80.5 million, an increase of 8.5%.

The cost of sales for the quarter, which includes player winnings and revenue-related expenses, actually declined slightly to €71.4 million. After deducting these costs from revenue, the company’s gross profit was €28.8 million.

Following the subtraction of operational expenses, the pre-tax profit saw a substantial rise to €6.3 million.

When factoring in interest, depreciation, and amortization expenditures, earnings before interest, taxes, depreciation, and amortization (EBITDA) reached €28.3 million, representing a 49.5% increase.

Intralot subsequently received a considerable €42.2 million in income from external investments, as well as €46 million in interest and similar earnings. This resulted in a notable surge in operating profit, transitioning from a loss of €13.7 million in the third quarter of 2020 to €67.2 million.

After deducting €3.7 million in taxes and a minor loss from discontinued operations, net profit for the quarter amounted to €63.5 million.

The robust third-quarter performance propelled year-to-date revenue growth by 24.4% to €302.8 million, driven by expansion across all key sectors.

Revenue from licensing operations, or wagering amounts, increased by 37.7% to €94.8 million, fueled by improvements in Malta and Argentina, where growth counterbalanced particularly weak exchange rates.

Technology and support services were the primary contributors to year-to-date revenue, reaching €173.4 million, which Intralot attributed to strong performance in the United States. Revenue in the region rose by 22.9% year-over-year, driven by growth in lottery operations, fueled by a substantial jackpot in January.

Australia also witnessed a strong recovery from the COVID-19 pandemic, while Argentina’s recovery and the initiation of a new contract with Hrvatska Lutrija in Croatia offset sales declines in other markets.

Intralots earnings saw a substantial upswing in the third quarter, fueled by the robust performance of its sports wagering operations. The company’s management agreements experienced the most notable growth, surging by 65.8% to €34.6 million, driven by the success of Bilyoner, a Turkish sports betting game distributor. Revenue from the La Marocaine Des Jeux et Des Sports agreement in Morocco climbed by €3.7 million, while the introduction of sports betting in Washington D.C. and Montana added €3.3 million to the overall total.

Lottery continues to be Intralots primary revenue source, accounting for €183.8 million of total revenue. Sports betting closely trailed, contributing €53 million, while IT products and services added €36.9 million.

Horse racing contributed €1.5 million to the group’s turnover, with the remaining €27.6 million stemming from video lottery terminals (VLTs).

After subtracting player winnings, gross gaming revenue reached €244.4 million, representing a 21.2% year-over-year increase.

Subtracting the cost of sales (including payouts to players) of €216.3 million from the total nine-month turnover of €302.8 million as of September 30, Intralots gross profit reached €86.5 million. After deducting other income and operating expenses, earnings before interest and taxes (EBIT) reached €17.5 million, a significant improvement compared to the €9.2 million loss recorded in the first nine months of 2020. Earnings before interest, taxes, depreciation, and amortization (EBITDA) reached €82.6 million, nearly double the total recorded in the same period last year.

Elevated investment and interest income profit share in the third quarter bolstered Intralots bottom line for the period, resulting in the company transitioning from an operating loss to a profit of €56.8 million.

Intralots financial performance has seen a dramatic shift in the current year. The firm has recorded a profit of €40 million for the current fiscal period, a stark contrast to the €62 million loss reported in the same timeframe last year. This turnaround, after accounting for taxes and discontinued operations losses, points to a positive trajectory for the company.

“The strong operational performance and positive effects of the capital structure optimization agreement reached in early August are reflected in the nine-month results,” stated Sokratis Kokkalis, Intralots Chairman and CEO.

“The notable enhancement in cash flow generation and robust EBITDA margins, combined with reduced future debt repayment expenses, underscore the strengthening of Intralots overall financial standing and the potential for pursuing new growth avenues through strategic collaborations.”

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