Durrant Pate/Contributor

Regional gaming giant Supreme Ventures Limited (SVL) has chalked up net profit of just over J$1 billion, representing an increase of J$369 million, or 58 per cent, for its just-ended June second quarter.

The increased profits were due to higher gross profit margins of J$984 million, or 40 per cent, which were driven by lower direct costs of $2.4 billion, or 17 per cent, when compared to Q2 2022. The SVL Group realised gross revenues of J$14.9 billion, a decline of J$1.4 billion, or nine per cent, over Q2 2022, which corresponds with a similar decline in gross ticket sales, which were J$25.73 billion for Q2 2023.

During the quarter, the Jamaica-based SVL, which also boasts operations in Guyana and Ghana, realigned responsibilities with its lottery software provider, which generated an additional J$420.7 million of income before taxes. Direct costs amounted to J$11.5 billion, a decline of J$2.4 billion or 17 per cent over Q2 2022.

Lower prize winnings

This was attributable to lower prize winnings of J$1.45 billion, or 25 per cent. Total costs for Q2 include contributions to government agencies and related bodies of over J$2.83 billion, as one of the largest government contributors.

The earnings per share of 37.72 cents for Q2 ending June 30, 2023 enabled the group to propose interim dividends to external shareholders of 26.45 cents for the three months ending June 30. Total assets attributable to shareholders ended the quarter at J$17.78 billion.

Total operating segments year-to-date recorded results of J$2.37 billion, an increase of J$278 million or 13 per cent compared with 2022, largely led by solid performance of the lottery segment. SVL customers continue to achieve record winnings, as the company focuses on increasing customer engagement across the base.

According to SVL, “This investment will result in long-term customer loyalty and positive results in the medium to long term. Caymanas Park continued its steady pace towards sustainability and profitability under the stewardship of Supreme Ventures Racing and Entertainment Limited.”

Half-year results

However, the company experienced a net loss before tax for the six-month period ending June 20, 2023 of J$93 million, due significantly to the required foreign exchange revaluation of the leased property liability to the tune of J$78.0 million and an increase in the bad debt provision to $24.6 million.

In addition, track purses paid out increased by J$15.2 million, from J$352.3 million to J$367.5 million, and there was an under-performance of race sponsorship in 2023, when compared to the budget. In comparison, prior year results for 2022 were J$68.5 million profit before tax.

The SVL Group generated positive cash flows from operations of J$933 million to close on June 30, 2023 with a balance of J$2.09 billion, representing a decrease of J$882 million compared to year end 2022. The group met all requirements and covenants under the terms of agreement with bondholders and other credit facilities during the quarter. Selling general and administrative expenses (including depreciation and amortisation) for the six months ending June 2023 were J$700 million above the same period in 2022.

The main drivers were staffing costs, foreign travel, marketing and business development, professional services, bad debt expenses, as well as subscriptions and donations. Much of this expenditure was directly linked to expansion into other territories and automation projects being implemented to drive the digitisation of the group.

SVL increased its bad debt provision to safeguard against an increase in trade accounts receivable, however, collection efforts remain a focus of the group and recoveries are expected as the measures implemented continue to make an impact. Digital innovations—such as its lottery online platform SV Games, access to sports betting online through Just Bet Mobile, casino-type games with Acropolis Online and horseracing through MBet—are all growing mobile channels from which the company expects great results.

Lottery products continue to grow

SVL flagship lottery products continue to grow and the introduction of the “Scratchaz” games has been an overwhelming success. The SVL Group’s digitisation is comprehensive and its potential for growth is exponential. As a result, SVL continues to put back over 93 per cent of its earnings into the Jamaican economy via prizes, fees, taxes, and operational payments.

The company said since 2004, it has contributed J$25.7 billion to the Jamaican government for good causes.