Intralot nine-month net profit seen flat after loss of Stoichima

Intralot, the world’s second-largest lottery systems supplier, is seen reporting flat nine-month net profit as the loss of a lucrative Greek sports betting game and start-up costs will offset two big IT deals. Seven analysts polled by Reuters forecast on average a net profit of -82.6 million, versus -82 million a year earlier. Intralot, which also operates sports betting around the world worth about -4.5 billion, last year signed two large contracts with Greek betting monopoly OPAP for hardware and software. The very high profit margin on the deals is expected to make up for the loss of the risk management contract for OPAP’s fixed-odds sport betting game Pame Stoichima, along with start-up costs in Italy and South Africa. For Intralot, the loss of the Pame Stoichima contract means it will no longer receive a commission of about 8 percent on the game’s sales, which came to about -2.3 billion in 2006. Earnings before interest, tax, depreciation and amortization were forecast to have dropped 2.9 percent. «Margins are seen declining, partly because of the loss of the lucrative contract to run Pame Stoichima, but also because of the high costs incurred to start up operations in Italy and South Africa,» Marfin Analysis wrote in a preview note. Earlier this year, Intralot started running sports and horse betting outlets in Italy and the national lottery in South Africa. Intralot, with operations in 40 countries, has pursued an aggressive expansion plan in recent years to cash in on the liberalization of world gaming markets. It recently clinched deals in South Korea and Russia and has said it wants to enter the United States. Intralot has forecast 2007 net profit will rise 10 percent to -115 million on sales up 11.2 percent at -880 million. (Reuters)