ECONOMY

OPAP 2007 net profit up 10.5 pct on Kino success

Europe’s biggest betting firm OPAP is expected to report a 10.5 percent rise in 2007 net profit as higher Kino lottery revenues help offset one-off costs, analysts said yesterday. Seven analysts polled by Reuters forecast, on average, group net profit of 564 million euros ($886.6 million), up from 510 million in 2006. «Kino contributed to the rise in sales. Taking Stoichima in house has benefited the group’s gross profit margin,» said Yiannis Arapoglou, analyst at Piraeus Securities. OPAP, which recently appointed a consultant to help review operations, took over the management of its fixed-odds betting game Stoichima from lottery systems operator Intralot early last year in a move to save costs. Sales from Kino, estimated to account for a bit less than half of total revenues, are seen as rising 27 percent to 2.34 billion euros after the firm extended the game’s playing hours and leased more terminals for the lottery. Group revenues are forecast to rise 6.3 percent to 4.9 billion euros with earnings before interest, tax, depreciation and amortization (EBITDA) seen up 8.5 percent to 800.63 million euros. «Distribution costs rose significantly and this is partly due to the fire donation,» added Arapoglou. OPAP is expected to book the second half of the 50 million euros it gave to a relief fund for the victims of wild fires in the summer in the fourth-quarter. High sponsorship and advertising costs along with expenses for an IT deal with Intralot, to upgrade its hardware and software, are also seen weighing on earnings. OPAP shares trade about 10 times 2008 estimated earnings, compared with a multiple of 11 for British bookmaker Ladbrokes and 8 for William Hill, according to Reuters Estimates. (Reuters)