Retail rebound helps OPAP to strong Q1 performance

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The Allwyn-owned operator credited recovery of its retail business for a strong start to the year, after operations in the prior year were hampered by Covid-19 restrictions.

Gross gaming revenue (GGR) for the three months to 31 March 2022 amounted to €457.2m (£389.2m/$489.8m), up 162.5% from €174.2m in the previous financial year.

OPAP said the Q1 2021 comparables were adjusted after it upped its stake in Stoiximan Group’s Greek and Cypriot business. It closed a deal for a 51% stake in August 2020, then increased this to 84.4% in November last year.

Lottery remained the primary source of revenue, with this division generating €170.0m, up 364.5% year-on-year, after it returned to full capacity across all channels.

Betting revenue increased 85.6% to €152.8m, supported by favourable comparables in retail and accompanied by strong online contribution. Video lottery terminal revenue was €69.4m, after no revenue was recorded for the division in Q1 2021, due to the shutdown of machines in line with Covid-19 measures.

Instant and passives revenue jumped 198.7% to €23.5m, again helped by the relaxation of Covid-19 rules, though online casino revenue fell 12.4% to €41.5m.

Turning to costs, OPAP noted €144.6m worth of GGR contributions and other levies and duties, as well as €89.9m in agent commission, €33.7m in other direct costs and €17.0m of other operating costs. These were only partially offset by €82.6m in other operating income.

In terms of operating expenses, payroll expenses were 8.5% higher at €20.2m, marketing costs increased 45.2% to €23.3m and other operating expenses hiked 54.4% to €45.1m.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 175.4% to €168.8m, while after including €135.0m in depreciation and amortisation costs and €15.5m in finance costs, this left a pre-tax profit of €119.5m, up 724.1% year-on-year.

OPAP paid €29.6m in tax during the quarter, resulting in a net profit of €89.9m, an increase of 877.2% on last year.

“Following a strong FY 2021, OPAP posted a solid set of Q1 2022 results, driven by the solid retail contribution – despite the Covid-19 restrictions being in place – and the continuing online momentum,” OPAP chief exectuive Jan Karas said. “This was a result of multiple business initiatives, which focused on delivering engaging entertainment experiences and led to high customer attraction and retention levels.

“Geopolitical tensions and inflationary pressures affect private consumption, partially offsetting the positive impact of the lifting of various Covid-19 measures. However, our results reaffirm the attractiveness of our retail and online propositions, the power of our diversified product portfolio, the resilience of our business model, and our robust financial position.”

OPAP was therefore confident that it would continue to deliver value to all stakeholders, he added.

“Initiatives like the renovation of Greece’s two largest hospitals, which was successfully concluded and delivered to the state recently, showcase our commitment to giving back to society.”

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