ECONOMY

Lottomatica sees fortune

MILAN – Lottomatica, the world’s largest lottery operator, said profits should rise by about 8 percent a year over the next three years, as it expands its sports betting operations – a lower target than the market had expected. The Rome-based company said in a statement it expected earnings before interest, tax, depreciation and amortization (EBITDA) to rise to as much as -670 million in 2007 and sales to reach -1.75 billion. The company’s EBITDA in 2005 was -266 million. It will report full year 2006 earnings on March 9 but declined to give a forecast yesterday. Lottomatica also said it plans to pay out a dividend of as much as -130 million a year over the next three years, Chief Executive Officer Bruce Turner told analysts at a presentation in Milan. «Based on the industrial plan’s guidelines, Lottomatica’s multiples are too high,» a trader said. The shares fell more than 5 percent and at 12.00 GMT were down 4.7 percent to -32. Lottomatica in August took over US-based GTech in a $4.7 billion deal to create the world’s biggest lottery group, with operations in 50 countries, 6,300 employees and sales of more than $2 billion. By 2009 Lottomatica aims to have -500 million in cash and net debt of -2.2-2.4 billion. The company plans to increase its prices, expand its instant lottery ticket sales and develop its Italian racehorse and sports betting business. In December, Lottomatica won 1,144 sports betting and 500 horserace betting licenses in Italy. The company also aims to enter the online, mobile-phone and interactive TV betting markets. Lottomatica has a 63 percent market share of international lotteries open to private operators. It aims to bid for lottery concessions in Greece, Russia, Romania, Bulgaria and Hungary, as well as in Vietnam, South Korea and China over the next two years. Lottomatica already operates two lotteries in China out of a total of 60 provincial lotteries. China is also considering a national lottery, Turner said. Bidding for Illinois, Indiana The operator, which has an 80 percent market share in the USA, will also bid for the Illinois and Indiana lottery privatizations, partnering with a «global financial partner,» Turner said, declining to be more specific. Lottomatica is 56-percent owned by Italian publishing group De Agostini, headed by Chief Executive Marco Drago. In Italy, lottery gambling in the first nine months of the year rose 20 percent year on year to 7.7 billion euros. Fourth-quarter results for the group were in line with the trend reported during the first nine months of the year, Italy CEO Marco Sala said. In November, the company reported nine-month net profits down 65 percent on costs related to the purchase of US firm GTech. Revenues rose 26 percent to -566 million.