Home Finance Lottomatica’s Q1 profit falls as costs increase

Lottomatica’s Q1 profit falls as costs increase

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The net profit at Lottomatica dropped by 31.1% during the first three months of 2024 despite an increase in revenues, bets, and gross gaming revenue.

The revenue increased by 4.2% on an annual basis to EUR440.1m. (PS375.5m/$470.7m). GGR reached EUR1.01bn and increased by 1.0%. Bets also increased 19.5%, to EUR8.7bn.

Guglielmo Angleozzi, the chief executive of Lottomatica said that the improved performance on market had boosted Lottomatica’s quarter.

Angelozzi said, “In the first three months of 2024, we continued to grow organically, supported also by strong market tailwinds. Revenues and EBITDA have grown double-digits YoY, at normalised payout.”

Lottomatica acquired SKS365 Malta Holdings after the end of Q4. This deal, originally agreed during Q4, had a value of EUR639m ($685m/PS548m) and was initially valued at EUR639m.

Angelozzi added, “We are continuing to implement our pipeline of bolt on M&A, as we have completed the successful acquisition of SKS365 by April 2024. We therefore upgraded the guidance and will continue to execute the strong M&A that is in the pipeline.”

Lottomatica announced the acquisition of SKS365 in an effort to increase its presence throughout Italy.

Online bets jump 35.5%

The majority of bets were placed online, totaling EUR5.05bn. This represents a 35.7% increase year-on-year. Lottomatica’s gaming segment accounted for EUR2.85bn in bets, a 0.8% increase. The total bets placed on sports were EUR822m, the lowest in the last quarter, but still up by 9.7% annually.

In the first quarter, the market share of online GGR stood at 21.6%. Online gaming and online sports GGR accounted for 21.8% of the market, while online sport GGR occupied 21.2%.

EBITDA adjusted fell 4.0%, to EUR149.2m. It fell by 40.0% in the Sports segment to EUR19.7m.

Lottomatica generated revenues of EUR195.3m from its gaming franchise. It was an increase of 4.0% over Q1 2023. Lottomatica’s online segment saw the biggest increase, with revenue of EUR150.3m. This represents a 21.1% rise. The Sports segment’s revenue fell 14.5%, to EUR94.3m.

The total income and revenue for the year totaled EUR433.9m.

Costs are up everywhere

All expenses grew by 7.2% compared to Q1 2023. The cost of services was the highest in the quarter, at EUR265.1m. This is 7.2% higher than Q1 2023. Personnel costs increased by 6.3%, to EUR26.0m. Finance expenses jumped 20.8% up to EUR45.2m.

Depreciation and amortisation grew from EUR12,000 to EUR51.9m. This section only had finance income which was EUR6.0m, a huge increase over the EUR12,000 in Q1 of 2023.

Lottomatica’s pre-tax profits fell 21.0%, to EUR52.5m. After income tax expenses of EUR22.3m the net profit was EUR30.1m. This is a decline of 31.1% from Q1 2020.

Lottomatica has also provided its FY24 guidance. The revenue is projected between EUR2.02bn to EUR2.06bn. Adjusted EBITDA will be in the range of EUR680m to EUR700m. This includes eight months’ contribution by SKS365.

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