AGTech Reports Reduced Losses and Revenue Growth in Q3 2021

AGTech reported a significant revenue increase for the third quarter of 2021, reaching HK$67.0 million (approximately £6.4 million, €7.5 million, or $8.6 million), nearly matching its total revenue from the first half of the year. The majority of this income stemmed from lottery hardware sales and services, amounting to HK$39.1 million, along with HK$9.5 million generated from lottery distribution via physical channels and ancillary services. In the lottery games and systems segment, AGTech earned HK$10.0 million from games and entertainment, while non-lottery hardware sales and services contributed HK$8.4 million. This uptick in revenue, in conjunction with a modest reduction in operating costs, allowed the company to decrease its operating loss to HK$10.2 million for the quarter, a sharp decline from the HK$18.9 million operating loss recorded in Q3 2020. The company's bottom line benefited from HK$3.6 million in gains from changes in the fair value of financial assets and HK$3.9 million in net finance income, narrowing its pre-tax loss to HK$2.7 million. A tax credit of HK$9,000 ensured that AGTech's net loss also stood at HK$2.7 million, a marked improvement from the prior year's loss of HK$47.1 million. Overall, the improved performance for Q3 pushed AGTech's revenue for the first nine months of the year up by 36.0%, totaling HK$144.9 million. During this period, lottery sales in China, as reported by the Ministry of Finance, reached RMB278.5 billion, reflecting significant recovery in comparison to 2020, when the market faced severe disruptions due to the Covid-19 pandemic. As the market rebounds, AGTech successfully secured 20 lottery hardware tenders to supply lottery terminals to Sports Lottery Administration Centres throughout the first three quarters of the year. The company emphasized that these successful tenders solidify its leading position in China’s lottery hardware sector and showcase the competitiveness of its lottery terminals. AGTech noted, "Despite ongoing headwinds and uncertainties with regard to the Covid-19 situation globally, we have seen a steady recovery in the PRC market since lottery-related activities resumed. The group will proactively transform and build on our leading position within the Chinese lottery industry." The lottery hardware division alone contributed a majority of the year-to-date revenue, totaling HK$78.8 million, with another HK$28.8 million stemming from distribution services. Furthermore, the company's expansion into other consumer sectors, such as point-of-sale terminals in the Chinese retail market, generated HK$17.1 million in revenue for the current year. Additionally, AGTech’s games and entertainment revenue reached HK$20.1 million for the nine-month period, with HK$18.1 million derived from its India-facing mobile gaming platform, Paytm First Games. After accounting for operating costs, the company reported an operating loss of HK$65.3 million for the first three quarters, down from HK$124.5 million. Reduced investment losses helped to lower pre-tax losses to HK$48.3 million. Including HK$1.9 million in taxes, AGTech's net loss for the nine months ending September 30 stood at HK$46.3 million, compared to a substantial loss of HK$156.9 million in the same period of 2020.