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Intralot Hit by Falling Revenues

30th November 2009 8:05 am GMT

Greece's Intralot S.A has reported consolidated revenues of €192.6 million for the third quarter of 2009, a 25% decline on the same period last year, with revenues for the nine months ended September 30th down 15% at €680.6 million.

Intralot also reported lower costs during the quarter with selling expenses falling 49% to €7.6 million and administrative expenses down 18% to €15.5 million, resulting in 10% higher earnings before interest and tax (EBIT) at €28.3 million.

Despite lower paid taxes than in the comparable period, the company's bottom line was negatively impacted by currency exchange differences of €3.7 million for the quarter compared to a gain of €5.2 million last year. As a result the company's quarterly net profit fell 6% to €15.8 million.

For the nine month period, Intralot reported consolidated revenues of €680.6 million, a 15% decrease on last year, with net profit down 25% at €57.8 million.

Commenting on the results, Intralot CEO Constantinos Antonopoulos, said: "Intralot's Q309 financial results show a stabilisation compared to Q3 2008. The top line was affected by a continuing sluggish global economy, FX impact, which is less severe than in the previous quarters, the outset of the new Turkish betting contract in March this year, and an unfavourable comparison with the previous year where the Euro Championship took place.

"From a balance sheet point of view, net debt for the Group increased slightly by €7 million in the quarter, taking also into consideration the capex for major projects like Arkansas. This is a large improvement compared to the previous quarters, where we experienced increases of net debt between €20-30 million per quarter.

Intralot said that sales from the successful launch of operations in Arkansas, set up in just 45 days, have so far exceeded the company's expectations. During the quarter, the company also signed a deal with Cogetech to jointly exploit the lucrative video-lottery market in Italy as well a further deal with Loteria Concepcion in Chile.

Intralot said it is also closely monitoring opportunities such as the outsourcing of operations for the Illinois Lottery and the upcoming liberalisation of the online gaming market in France, amongst others.

Mr Antonopoulos added that the company believes that for as long as the global economic crisis continues to prevail, it could cause "volatility to financials in the short term for market and/or regulatory reasons."

However Antonopoulos believes that this crisis, coupled with the Greek Governments' need to finance their growing budget deficits, will also bring important opportunities to the sector in the short to mid-term.

"We maintain our focus on all gaming sectors and are very positive of our new initiative, Intralot Interactive," said Antonopoulos.

As at September 30th the company held cash and cash equivalents of €217.9 million compared to €330.5 million a year ago, with long-term debts of €465.3 million.

Shares in Intralot S.A (Co. Profile) (ASE:INLOT) will commence trading this morning in Athens at €3.68 per share.

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