ECONOMY

New game, Cyprus deal boost OPAP’s annual profit to 235 mln

Gaming group OPAP yesterday posted stronger-than-expected results as the launch of a new game and an acquisition in Cyprus helped to more than double fourth-quarter net profit and boosted its shares. Europe’s biggest betting group by market value reported a quarterly profit of 79.4 million euros ($98.5 million) compared with analysts’ forecasts of 71.4 million and well above the year-ago figure of 30.1 million. OPAP shares closed 1.9 percent up at 12.90 euros, outperforming the broader market, which fell 0.76 percent to 2,416.56 points. The group said the quarter got a boost from the new game Kino, which will be the company’s main growth driver this year as well. Also, in October OPAP finalized a deal to acquire 90 percent of Glory Leisure Holdings, which runs 91 betting shops in Cyprus. «The successful launch of Kino which made 10 million euros in just a month and played in a limited number of regions is very promising for the medium-term sales growth of the company,» said George Papangelis, analyst at Egnatia Securities. Analysts said the new numerical game was set to replace OPAP’s present main money-spinner Stichima sports betting game as the growth engine. «We expect Kino to be the main growth driver for sales from now on, whereas the growth rate of OPAP’s flagship game Stichima this year is seen stabilizing a bit higher than in 2003,» said Stamatis Diavatidis at Marfin Hellenic Securities. A strong fourth quarter lifted full-year net profit by 14 percent to 235.1 million euros, compared with an average forecast of a 10 percent rise in the Reuters poll of 14 analysts. Sales increased 15.6 percent to 2.28 billion euros, roughly in line with the company’s own forecast. Full-year adjusted earnings before interest, tax, depreciation and amortization (EBITDA) and excluding provisions rose 16.5 percent to 472.8 million euros. The 2003 result was dented by an 82.5-million-euro provision in the first quarter for potential damages sought by gaming systems provider Intralot for a delay in the introduction of new horse-racing and dog-racing games. OPAP has filed an appeal to overturn an arbitration court ruling that awarded Intralot 37.4 million euros for each year it delays the launch. A decision is expected in the first half of the year. The company said it would propose a full-year dividend of 73 euro cents per share. It has already paid 30 euro cents as an interim dividend in November. The figures were calculated according to International Accounting Standards.