By Durrant Pate
Amid the set back caused by COVID-19, gaming company Supreme Ventures Limited (SVL) is reporting strong profits for its just ended third quarter.
The improved group performance in the third quarter ended September 2020 resulted in profits of $622.8 million for the period, representing an improvement over prior year by $96.3 million. Total gross ticket sales for the quarter amounted to $19.9 billion, representing an increase of 12.6 per cent over the corresponding period in 2019.
In its interim report to stockholders for the quarter, SVL says total gaming income went up to $10.4 billion, which represents an increase of $409.9 million or 2.5 per cent when compared to the corresponding period in 2019, while direct expenses amounting to $8.2 billion was $613.1 million or 2.7 per cent, higher than the prior year same period.
According to SVL, “the group’s operation has reported significant improvements in Q3 and rebounded from the impacts of the closures and curtailment of operations in Q2. Overall segment results for the period contributed $2.4 billion, a reduction of $169.3 million or 6.7 per cent lower than the corresponding period in prior year”.
Higher prize money payout
Total prizes paid for the quarter amounted to $14.9 billion representing an increase of 16.28 per cent compared to Q2, 2019. SVL told shareholders that payments to Government agencies and regulatory bodies were $1.71 billion or 5.2 per cent higher than prior year.
Gross profit for the quarter amounted to $2.2 billion, representing an increase of 6.2 per cent or $354.3 million in comparison to the quarter ending September 2019. The increase is attributed to improved performance of the segments as well as the addition of Supreme Route Limited and Post-to-Post Betting Limited to the group results.
The group’s unaudited financial statements for the nine months ending September 30, 2020, shows net profit of $1.6 billion, which was a decline of $210.8 million or 12 per cent when compared to the same period in 2019. The reduced profitability for the period continues to be as a result of the second quarter performance, which was significantly impacted by COVID-19.
Revenue for the nine-month period amounted to $27.9 billion, representing a slight reduction of $122.7 million or 0.4 per cent over prior year.
COVID-19 fall out
SVL’s revenue growth was hit hard by COVID-19 with the company explaining that, “the group’s performance was impacted by COVID-19 measures such as curfews and social distancing, which affected revenue for some segments for the quarter. The focus is on providing alternative methods to access our products to boost revenues.”
Despite the setback, year-to-date gross ticket sales have improved by $2 billion or 3.8 per cent over 2019. However, there was an increase in the group’s operating expenses, which went up by $531 million year over year due to the consolidation of Post-to-Post Betting and Supreme Route Limited, which were not included in the group’s results in Q3 2019.
In addition, there was also a one-time strategic expenditure to support the current business objectives and activities associated with its planned acquisitions and expenses that support the increased revenues. On the matter of business expansion, SVL reported that, “in addition to the expansion of Sports Betting and VLTs, SVL is in the final stages to export the lottery signal to South Africa which will expand our earnings potential for our lottery products”.
Said SVL: “The subsidiaries are expected to make a positive contribution to the Group’s results despite the impact of COVID-19 on the operations.”
Segment results for Q3
Lotteries performed creditably during the period achieving gaming revenue of $14 billion which represents an increase of three per cent or $409 million compared to the corresponding period in 2019. The reported segment results of $2.9 billion represents a 17.8 per cent, or $439 million, increase over 2019.
The group continues to focus on key initiatives and terminal expansion. This has contributed to the positive performance for the segment. Sports Betting reported gaming revenue of $5.2 billion, representing a negative variance of $838.2 million, or 13.8 per cent, when compared to prior year.
The segment results of negative $91 million, was $22.1 million or 32.07 per cent more than prior year. The performance was impacted by the government imposed curfew orders resulting in the closure of locations, reduction of business operating hours and physical distancing protocols.
The segment was also impacted by the cancellation and postponement of various sport leagues. PIN codes achieved gaming revenues of $8.6 billion, representing an increase of $297 million, or 3.6 per cent, over prior year.
This increased performance contributed an uplift of $25.7 million or 23.9 per cent to the segment results when compared to prior year.
“The partnerships with our main distributors will continue as we focus on maximising the touch points for the end consumers,” SVL said.
With regard to the Guyana subsidiary, operations there resumed in mid-August, where the primary focus was retailer recruitment to increase the network.
“These activities were significantly affected by COVID-19 measures implemented by the Government; however, we have since resumed operations and are focusing on activating the target retailers by close of year,” SVL advised shareholders.