Lottomatica Interactive Revenues Climb 150%13th November 2009 9:13 am GMT
With growth across all of its business sectors, Italy's Lottomatica Group has reported revenues of €1.59 billion for the nine month period ended September 30th, an increase of 14% versus the same period last year with non-lottery products now representing 30% of the company's total revenues.
Lottomatica's lottery business contributed revenues of €1.1 billion during the period, an increase of 5% year-on-year, with gaming solutions contributing a further €209.9 million, up 42% versus last year.
The company's Italian sports betting business also showed strong growth with revenues rising 31% to €121.0 million, while commercial services accounted for a further €69.8 million in revenues, up 4% year-on-year.
Lottomatica's Interactive division recorded the strongest growth however after revenues jumped 150% to €78.5 million, with revenue contributions from GTECH G2 amounting to €49.9 million for the nine month period. Lottomatica's Italian operations generated revenues of €28.6 million from €241.6 million in skill game wagers, primarily from online poker.
As a result of the company's strong performance, EBITDA for the period improved by 4% to €596.4 million with margins of 37.5%. Total costs rose by 17% to €1.2 billion following increases in raw materials, services and personnel costs, leading the company to a marginal gain in net income to €143.1 million or €0.72 per share.
"Lottomatica Group has just completed a quarter in which we enjoyed significant commercial success," said Marco Sala, CEO of Lottomatica Group. "We have positioned ourselves to be the sole concessionaire for the Italian Scratch & Win license. By securing approximately 20% of the newly available VLT licenses, we will significantly expand our Italian Gaming Solutions business."
Sala said that revenue growth would also be enhanced following the approval of the cross-selling of multi-jurisdictional jackpot games Powerball and Mega Millions across the U.S.
"All of these developments will be significant contributors to the sustainability of our results," said Sala. "Industry trends are encouraging as well. Same store revenues appear to be on the up swing and anticipated operator opportunities are beginning to materialise. Further, we are seeing the beneficial impacts of governments expanding their lottery programs to meet severe budget gaps."
Following the recently announced share capital increase to fund expansion opportunities in the Italian market (more), Lottomatica hopes to further improve its capital structure through a €750 million bond, approved by the company's Board yesterday, which will allow the company to refinance a portion of its existing debt, extend the average maturity of its debt and add further diversity to its funding sources. The new bond is expected to be issued by March 2010.
As at September 30th, the company held cash and cash equivalents of €148.1 million compared to €154.8 million last year.
Shares in Lottomatica Group (Co. Profile) (MIB:LTO) will commence trading this morning in Milan at €14.40 per share.