OPAP H1 profit slows

Europe’s second-biggest gaming company, OPAP, reported first-half profits below expectations, hit by lower revenues from its flagship Stoichima betting game, but saw signs of an upturn ahead. Net profit came to 202.8 million euros ($244.5 million) in the first half of the year, up 5.5 percent from 192.3 million euros in the year-ago period after adjusting for the reversal of about 148 million euros in provisions, OPAP said. Analysts had forecast an average 9 percent rise in net profit to 209.8 million euros and a 12 percent drop in second-quarter net income to 92.2 million euros. Earnings before interest, tax, depreciation and amortization (EBITDA) rose 0.5 percent to 315.1 million euros, under International Financial Reporting Standards (IFRS). The company said net profit fell 21.9 percent in the second quarter to 81.9 million euros, hit by the inclusion of a 33-million-euro provision as a result of a higher payout to players. «We are pleased to report solid revenue growth for the first six months of this year, despite the significant decline in our sports betting revenues,» Managing Director Vassilis Neiadas said in a statement. OPAP had reported a 13.2 percent rise in first-half group sales to 1.7 billion euros in early July as its numerical betting game Kino offset a sharp drop in revenues from its fixed-odds betting game Stoichima – Greek for «Let’s bet.» Stoichima sales fell 31.8 percent to 602.7 million euros in the first half, while Kino revenue rose 187.3 percent to 857.8 million. Stoichima recovery «We are encouraged by the turnaround of our Stoichima game that we have witnessed thus far in the third quarter, resulting from our ongoing implementation of the measures to revitalize the game, which has so far been the increase in the payout ratio,» Neiadas said. Neiadas also said OPAP could launch its new betting game Bingo Lotto in the fall 2006. «We might start it in September next year,» Neiadas said in response to a question. He also said that OPAP’s sponsorship and advertising would rise to 70 million euros this year from 57 million euros last year. OPAP is also considering how it can manage on its own its fixed-odds betting game Stoichima, which is currently managed by gaming systems operator Intralot until early 2007 when the agreement runs out. «If we need additional help for a particular period, let’s say two years, to cope with the transfer of know-how to our people… we might look for a partner that can participate in the stock of our subsidiary,» Neiadas said. (Reuters)