OPAP: Profitability jumps to 167.3 million euros in the six months

OPAP ended the first half of 2022 with an explosive improvement in its figures at almost all levels, with its profitability increasing by 111.9% on an annual basis with net profits of 167.3 million euros.

In more detail, in the first half of the year, OPAP presented:

– Net income before contributions (GGR) for the first half of 2022 at €899.3m. against €570.1m in H1 2021, up 57.7% as a result of our stores being fully operational throughout 2022 and strong demand, despite weaker consumer dynamics overall. GGR in Q2 2022 was €442.1m, up 11.7% year-on-year, reflecting the strong performance of our retail activities (versus reduced trading activity in Q2 2021 due to the lockdowns imposed ), as well as the increased contribution of online.

– The gross profit (from games) in the first half of 2022 increased by 64.5% on an annual basis and amounted to €370.2m. (H1 2021: €225.1m), due to the increase in GGR combined with higher profit margins. In the second quarter of 2022 the gross profit (from games) amounted to €181.2m. (2nd quarter 2021: €161.7m) increased by 12.0%.

– Earnings before interest, taxes and depreciation (EBITDA) in the first half of 2022 higher by 63.9% to €335.7m. (H1 ’21: €204.8m) or increased by 80.5% on a recurring basis, also boosted by the revenues related to the extension of the concession contract. EBITDA in the second quarter of 2022 amounted to €166.9m. (2Q21: €143.5m), up 16.3% or up 19.2% on a recurring basis due to increased revenue and improved margins.

– Operating expenses for the first half of 2022 at €171.9m. against €151.4m in the first half of 2021, increased by 13.5% on an annual basis in order to support the full operation of our stores, while the operating expenses of the second quarter of 2022 amounted to €83.3m. decreased by 4.9% on an annual basis. On a comparable basis, excluding extraordinary funds, in the first half of 2022 operating expenses increased by 8.7% year-on-year, while in the second quarter of ’22 they decreased by 4.8% compared to the corresponding period last year.

– The net profits in the first half of 2022 amounted to €167.3 million. (H1 ’21: €78.9m) marking an increase of 111.9% on an annual basis (or an increase of 188.2% on a recurring basis). Net profits in the second quarter of ’22 amounted to €79.0m. (Q2 ’21: €70.3m), up 12.4% (or up 37.9% on a recurring basis).

– Strong cash position, with net borrowing at €26.3m, and Net Debt/LTM EBITDA ratio at 0.04x (0.1x including leases).

– Inflationary pressures are negatively impacting customer spending, with the gaming sector proving resilient compared to the rest of the Greek retail market and in particular the entertainment sector.

– €0.30 ex-dividend for the year 2022 (3x higher than the ex-dividend 2021) subject to the approval of the Board of Directors, with the right to reinvest in shares.

Jan Karas: Well-placed to achieve sustainable revenue and profitability volumes

Commenting on the financial results of the first half of 2022, Mr. Jan Karas, CEO of OPAP, said:

“Undoubtedly, the lifting of remaining coronavirus-related restrictions set the tone for retail activity in the second quarter of 2022, while at the same time there was softer consumer spending due to the growing macroeconomic challenges.

OPAP achieved strong financial results in the second quarter of 2022, thanks to the full reopening of the retail network and the exploitation of growth opportunities across the breadth of our portfolio. The renewed Tzoker.gr, the new OPAP Store app, the enhancement of Powerspin with combination options and the renewed People’s Lottery, combined with attractive promotions for our customers, enhance the entertainment experience of the players, both online and in retail channel. In addition, the successful utilization of customer data collected through the loyalty program contributes to increased gaming activity.

OPAP remains well-positioned to achieve resilient revenue and profitability volumes, as well as deliver on its long-term strategic priorities, in a manner that is sustainable and accountable to all of its partners.”

Net Income Before Contributions (GGR)

OPAP’s net income before contributions (GGR) in the first half of 2022 amounted to €899.3m. increased by 57.7% compared to the corresponding period last year (H1 2021: €570.1m) as a result of the full operation of our retail network throughout the first half of 2022. In Q2 2022 GGR amounted to €442.1m. increased by 11.7% year-on-year due to the strong recovery of retail activities on the one hand, compared to the limited commercial activity in the second quarter of 2021 due to the imposed lockdown, and on the other hand due to the increased contribution of online.

Gross profit from games

The gross profit from games in the first half of 2022 was €370.2m. against €225.1m in H1 2021 increased by 64.5% as a result of increased GGR and higher profit margins. Gross profit from games in the second quarter of 2022 amounted to €181.2m. increased by 12.0% on an annual basis against €161.7m. in the second quarter of 2021.

EBITDA

Operating earnings before taxes, interest and depreciation (EBITDA) amounted to €335.7m in the first half of 2022. against €204.8m in the first half of 2021 increased by 63.9% or by 80.5% on a recurring basis. In the second quarter of 2022, EBITDA amounted to €166.9m. against €143.5m. in Q2 2021, up 16.3% or up 19.2% on a recurring basis, reflecting increased GGR and improved margins due to lower operating costs.

Net profit

Net profits in the first half of 2022 amounted to €167.2m. against €78.9m in the first half of 2021 increased by 111.9% or by 188.2% on a recurring basis. In the second quarter of 2022, net profits amounted to €79.0m. up 12.4% or up 37.9% on a recurring basis.