Despite experiencing a 7.3% decrease in revenue during the 2023 financial year, totaling €364.0m, global gaming solutions provider Intralot has maintained a resilient stance toward future growth prospects. The revenue shrinkage, according to the company, is largely attributed to the non-renewal of its Maltese gaming license. This pivotal change accounted for a noticeable €43.9m drop in B2C revenue within licensed operations, which stood at €28.4m and reflected 7.8% of the company’s total revenue intake.
Intralot experienced heightened expenditure over the year, which, paired with the declined revenue, resulted in a decreased net profit. Despite this, a year-on-year elevated EBITDA suggests a silver lining where operating profitability has seen a steady upswing.
Chairman and CEO Sokratis Kokkalis expressed an optimistic perspective, lauding the company’s strategic achievements including margin expansion, debt reduction—plummeting by 32.1% to €333.2m—and strong cash flows. Emphasizing the significance of these accomplishments, Kokkalis highlighted the successful share capital increase and a comprehensive plan that achieved full refinancing of debt as cornerstones that fortified Intralot’s foundations and paved the way for the pursuit of substantial business opportunities worldwide.
The company’s performance breakup unveiled that the B2C revenue was predominantly affected by a dip in licenced B2C operations and external economic pressures such as the peso devaluation in Argentina. Nonetheless, Intralot experienced uplifts in other areas, particularly in its two B2B segments: management and technology, as well as support services. Aided by contributions from various markets like Turkey, Morocco, and the United States, management revenue soared 43.2% to €72.4m, and technology and support service revenues climbed 4.1% to €263.3m.
Intralot’s global footprint was further expanded with a new contract with Taiwan’s Public Welfare Lottery that showed promising revenue growth of 9.8%. Although minor declines were observed in Australia due to unfavorable foreign exchange developments, revenue from the Americas, which remains Intralot’s leading regional market, the Americas, hit €210.3m. Overall, Europe saw a 6.0% revenue decline, but increases in other regions, resulting in a 30.7% rise to €91.4m, helped buffer overall revenue contractions.
Lottery games constituted a major portion of revenue generation, accounting for 53.4% of total revenue in 2023. Sports betting contributed 20.5%, while video lottery terminals and IT products and services were responsible for 11.8% and 14.3% respectively.
In terms of operating costs, an escalation of 14.3% to €114.1m was offset by reduced depreciation and amortisation expenses, and lower interest and related expenses, leading to an improved pre-tax profit margin by 12.8% at €33.6m. However, the net profit after tax and minority interest (NIATMI) fell slightly by 7.6% to €5.8m.
In Q4 2023, Intralot faced tougher times with revenue dropping 7.7% and heightened operating costs by 27.2%. Despite this, the last quarter boasted a reduction in interests and related costs.
Entering 2024, Intralot has been propelled by a slew of contract renewals with existing partners, signifying sustained confidence and the promise of stability. These include extending the long-standing partnership with Magnum Corporation of Malaysia and an agreement with Morocco’s La Marocaine des Jeux et des Sports, as well as securing a new sports betting partnership with the British Columbia Lottery Corporation during the previous year.
Kokkalis’s commitment to seizing “significant business opportunities” is a clarion call to Intralot’s anticipatory fervor in expanding its global reach and solidifying its market presence in the gaming industry.
