OPAP (Results Q2/H1 2014): By Manos Chatzidakis

OPAP (Results Q2/H1 2014): OPAP announced a strong set of results which came at the high end of consensus estimates range. Key financial figures:

¡  Revenues increased by 9.7% to €1,912.8m (H1 2013: €1,744.3m). Q2 2014 revenues increased by a considerable 8.3% to €947.3m (2013: €874.9m) owing to a significant 31.5% Stihima growth due to World Cup in Brazil. 

¡  Gross Gaming Revenue (GGR) up 6.0% at €616.2m (H1 2013: €581.6m). Q2 2014 GGR rose by 6.1% at €296.1m (Q2 2013: €279.0m), growing for a second successive quarter.

¡  Flagship games “Stihima” and “Kino” account for c88% of total revenues. Stihima revenues in Q2 2014 increased by 31.5%, growing for a 4th consecutive quarter. Playing hours’ constraints caused by the time difference handicap carried an impact on the specific event-related performance. KINO’s revenues in Q2 2014 reached €479.9m, lower by 2.1% y-o-y, carrying a small impact from scratch tickets’ introduction in May

¡  Payout to lottery and sports betting winners in H1 2014 reached 67.8% versus 66.7% in the corresponding period last year. Stihima payout in Q2 2014 remained broadly flat y-o-y at 72.6% vs. 72.5% in Q2 2013., Stihima’s GGR for the quarter reached €99.1m, demonstrating a considerable 30.6% increase y-o-y. KINO payout in Q2 2014 stood at 69.3% vs. 69.6% in Q2 2013

¡  Hellenic Lotteries had a strong kick start (fully consolidated from 19.06.2014 onwards) with revenues reaching €120.8m in just two months of operations. 

¡  EBITDA at €144.9m (H1 2013: €103.3m). Q2 EBITDA at €68.6m (Q2 2013: €45.7m), higher by a solid 50.1% y-o-y, further improving Q1 trends. Notably, after adjusting for one-off items of €7.1m mostly related to the Voluntary Retirement Scheme (VRS), Q2 2014 EBITDA would reach €75.7m higher by 65.7% y-o-y. 

¡  On the cost side Q2 2014 cost of services would stand at €123.6m, lower by 2.3% y-o-y) and distribution expenses (Q2 2014 at €20.4m down by 28.7% y-o-y). 

¡  Net Profit came in at €65.4m (H1 2013: €67.3m). Net profit in Q2 2014 stood lower by 44.5% to €15.7m (Q2 2013 2013: €28.4m), owing in the most part to incremental taxes of €21.6m stemming from a 2010 fiscal year tax audit. After adjusting for taxation and other one-off expenses, Q2 net profit would stand at €44.2m higher by 55.7% y-o-y. 

¡  Cash position reached €194.9m while net debt at the end of Q2 stood at €150m.

A conference call is scheduled today at 16:00 GR time. Focus will be on VRS results, VLT’s rollout, new revenue scheme negotiation with Agents and regulation issues regarding online monopoly.

Dial-in numbers:

¡  UK participants +44 (0) 800 376 9250

¡  Greek participants +30 211 180 2000

¡  US participants +1 866 288 9315

¡  Other International +44 (0) 203 0595 872

OPAP	Results H1 2014			Estimates H1'14
In thous. euro	2013	2014	Δ	H1 14 E	Δ (Est)
Sales	1,744,274	1,912,791	9.7%	1,900,000	0.7%
Q2	874,974	947,282	8.3%	934,491	1.4%
EBITDA	103,296	144,890	40.3%	140,000	3.5%
(% Sales)	5.92%	7.57%	+165 bps	7.37%	+21 bps
Q2	45,701	68,614	50.1%	63,724	7.7%
(% Sales)	5.22%	7.24%	+202 bps	6.82%	+42 bps
Net Income	67,313	65,415	-2.8%	63,000	3.8%
(% Sales)	3.86%	3.42%	-44 bps	3.32%	+10 bps
Q2	28,372	15,739	-44.5%	13,324	18.1%
(% Sales)	3.24%	1.66%	-158 bps	1.43%	+24 bps

*Including the one-off tax of €21.6m resulted from the conclusion of the tax audit for fiscal year 2010.