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Intralot Posts Mixed Results for H1 2023

Greek iGaming provider, Intralot, recently published its financial results for the first six months of 2023. The results are a mixed bag, as the company’s overall revenue has gone down; however, it has reported a rise in earnings before interest, tax, depreciation, and amortization (EBITDA). The company also reported a healthy cash flow in H1 2023, which largely contributed to its EBITDA being up year-on-year (YoY). Intralot, a global leader in lottery products, reported a 14% dip in its revenue, despite an equal rise in the EBITDA.

A man crunching numbers.

Intralot shows positive EBITDA despite dip in revenue. ©Towfiqu barbhuiya/Unsplash

INTRALOT is a Greek company that provides integrated gambling, transaction processing systems, game content, sports betting management, and interactive gambling services to state-licensed gaming organizations worldwide. It was established in 1992 by its Chairman and CEO Mr. Sokratis Kokkalis as a spin-off of the Intracom group, owned by him. Initially, it provided infrastructure for the Greek National Lottery (OPAP) under a 1999 contract, but it has since expanded its operations into a worldwide market. The gaming solutions provider’s games library includes a variety of games such as numerical games, TV lottery games, sports lotteries, fixed odds betting, instant lotteries, pari-mutuel, video lottery, and monitor games. Intralot has a presence in 53 countries and a workforce of approximately 5,400 people. The organization is a publicly listed company on the Athens Stock Exchange, and it is a member of the Hellenic Network of Corporate Social Responsibility.

Over the years, Intralot has steadily grown to become the global market leader in lottery products. Though the company has struggled with revenue growth at times, its expansion has been steady throughout which has resulted in its position as the top lottery products provider in the world. Intralot acquired a 35% stake in Gidani, the South African National Lottery operator in December 2009. This was followed by a 49% stake in Bit8, a Maltese gaming company in 2010. In 2017, the company signed a contract with the Illinois Lottery to provide a new central gaming system and related services. It announced a year-on-year revenue growth of 15.1% and EBITDA growth of 3.6% in H1 2017. In 2018, Intralot signed a contract with the New Hampshire Lottery to provide a new sports betting platform.

Intralot recently announced its H1 2023 financial results, which were mixed. The company’s revenue has fallen, continuing the trend from 2022, however, its EBITDA has risen YoY. The results showed a 14.4% dip in revenue, standing at €175.3 million ($190 million), down from €204.8 million ($222 million) in H1 2022. Despite the revenue decrease, the company recorded NIATMI (Net Income After Tax and Minority Interest) of €4.4 million compared to €-0.5 million from last year. Gross Gaming Revenue (GGR) stood at €163.6 million down 2.9% from €168.5 million in H1 2022. The decline in revenue was largely caused by Intralot discontinuing its Malta business, which impacted the performance of its Licensed Operations B2C unit. The company’s revenue fall was also due to a 75% decrease in B2C activities from its licensed operators and major falls in its Bulgaria and Turkey revenue. Despite the revenue decrease, the company maintained its EBITDA growth and healthy cash flows. As a result, it reported a continuing EBITDA growth of 14.0% to €62.8 million in H1 2023 as compared to €55.1 million in H1 2022.

Sokratis P. Kokkalis, the chairman and CEO of Intralot, was happy with the financial results. He believed that the rise in EBITDA would help the company with its global expansion plans.

“Intralot’s results for the first half of 2023 show continuing EBITDA growth of 14.0% and healthy cash flows as the company consistently focuses on higher profit margin activities and lower leverage ratios. These developments allow us greater confidence in refinancing our upcoming maturities with an improved credit profile and address significant opportunities in the US and around the globe.”

How Q1 and Q2 this year have compared to 2022

Intralot’s revenue for Q1 2023 was €187.4 million, which was a 3.8% increase compared to the same period in 2022. The EBITDA for Q1 2023 was €25.6 million, which increased by 2.9% compared to the same period last year

. The company posted a net profit of €3.1 million for the first quarter of 2023, which also rose 3.3% from the previous year. Similarly, the results for the second quarter were also positive, with the revenue increasing by 6.6% to €205.4 million, the EBITDA went up by 6.2% to €28.3 million, and the net profit was up 5% at €4.2 million as compared to the same period in 2022.

Intralot credited the jump in quarterly EBITDA to “substantial growth” in its US operations, where revenue and EBITDA jumped 13.1% and 31.6% respectively year-over-year. A boosted performance was also seen in Turkey, further contributing to the overall EBITDA growth. Last year, the company had posted stable results for their Q1, as a part of recovery from the pandemic. Intralot’s turnover for Q1 2022 was €97.7 million. According to the company, the largest contributor to its growth last year was the lottery market in Argentina. It contributed 32.4% to the company’s revenue. Intralot saw a decrease in its earnings from operations in Malta last year, which prompted the company to cease operations in that region in 2023. Though the decision has resulted in a decline in revenue so far in 2023, the company hopes to focus more on profitable markets in the near future.

Intralot extends contract in the US

Intralot SA’s presence in the US market contributed to its growth in the first six months of 2023. The company has been targeting sustainable growth in the US and key markets around the world. This has enabled the iGaming provider to build a strong presence in the US market, which has contributed to its overall growth. Despite the group revenue being down in H1 2023, the US operations revenue was up by 13%. The company has taken its association with the US one step further by announcing the contract extension of its subsidiary INTRALOT, Inc. with the Wyoming Lottery Corporation for an additional five-year term.

The contract extension will help Intralot boost its revenues and empower communities in Wyoming. The deal is a significant win for Intralot, as it allows the company to continue its successful partnership with the Wyoming Lottery Corporation until 2034. Intalot Inc. has been working with WyoLotto since its launch in 2014. Last year, the two entities signed an agreement to extend their partnership until 2029. However, given the boost the US market has provided to the Intralot group’s growth, the company has immediately extended its association for an additional five years to 2034.

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Author: James Richardson