The Greek gaming giant OPAP has encountered a slight dip in revenues during the third quarter, as reported financial figures illustrate a 3.6% drop in revenues versus the same period last year, amounting to €481.0m. Despite this downturn, the company’s Chief Executive, Karas, expressed an optimistic perspective, underscoring the strength and progress of several initiatives that are expected to fuel the long-term growth trajectory of the company.
One of the highlights of the quarter was the continued expansion of the company’s online segment, with the Opaponline.gr ilottery proposition experiencing robust double-digit growth rates. Karas spotlighted the sweeping overhaul of OPAP’s draw-based games, accompanied by the successful strategic relaunch of the Lotto as an annuity game. The initial response from customers and agents to these developments has been favorable, suggesting a positive impact on future performance.
Karas affirmed the company’s ability to sustain strong returns for shareholders and honor its commitments to sustainability and social responsibility, notwithstanding the revenue contractions when compared to the previous year’s results. “OPAP reported a healthy performance in Q3, marked by continuing online growth, despite tough year-on-year comparatives and headwinds to the top line,” said Karas. The executive conveyed confidence in the resilience of OPAP’s business model as the company advances towards the conclusion of the fiscal year.
In dissecting OPAP’s revenue streams, lotteries topped the gross gaming revenue charts at €166.0m, although this captured an 8.0% drop primarily due to unfavorable jackpot roll-over cycles in Tzoker and last year’s strong performance. The revenue from the betting segment also fell by 7.8% to €144.0m due to a limited event calendar and customer-friendly sports outcomes. On a brighter note, OPAP cited a positive trend in customer base expansion, bolstered by increased retail foot traffic.
The video lottery terminals (VLTs) sector delivered more promising news with a 2.3% incline in revenue to €82.9m, while the online casino segment saw a notable increase of 13.4% to €62.5m, attributed to higher player engagement and the integration of sports betting players into the casino space.
On the flipside, instant and passive game revenues experienced a slight decline of 1.7% to €25.6m, with the decrease being ascribed primarily to a downturn in scratch game sales.
The cost side showcased a reduction in gaming revenue-related expenses, down to €134.8m, but operating expenses saw a substantial hike of 44.4% to €114.6m due to augmented investment in retail and online expansion efforts. Moreover, depreciation and amortisation expenses touched €33.4m, with net finance costs amounting to €3.7m, describing a pre-tax profit picture of €108.3m, a 30.9% fall compared to last year.
The tax bill for the third quarter stood at €21.1m, leading to a net profit of €87.1m, marking a 28.3% year-on-year decrease. Further, EBITDA descended 26.4% to €145.4m.
Comprehensively analyzing the nine-month performance until 30 September, OPAP’s revenue surged by 7.8% to €1.51bn, with various sectors like lotteries, betting, VLTs, and online casinos all witnessing revenue upswings. Despite soaring gaming revenue-related costs and operating expenses, pre-tax profit improved by 9.0% to €412.9m and net profit increased by 9.4% to €315.8m compared to the same period in 2022. However, it wasn’t all smooth sailing as EBITDA receded slightly by 2.5% to €519.9m.
Post the third quarter, OPAP grappled with a €24.5m fine levied by the Hellenic Gaming Commission for infringements pertaining to Greek competition law and regulations detailed in the Treaty on the Functioning of the European Union. These breaches pertained to abusive market dominance and unfair trading practices. OPAP has voiced strong disagreement with the ruling, declaring that the decision fails to accurately reflect its core gaming operations, instead focusing inappropriately on services provided by its agencies. OPAP’s stance in this disagreement sets the stage for potential legal contestations as the company defends its market practices.
