July 31, 2020

Supreme Ventures Limited (SVL), for the six months ended June 30, 2020, reported a 6% decrease in ‘Total Gaming Revenue’ from $18.62 billion in 2019 to $17.54 billion in 2020. For the quarter, ‘Total Gaming Revenue’ closed at $7.42 billion (2019: $9.31 billion).

Revenues from the Company’s segments were as follows:

• Revenue from ‘Non fixed odd wagering games, horse racing and pin codes’ amounted to $9.70 billion (2019: $10.90 billion), a 11% decrease.
• Income from fixed odd wagering games, net of prizes totaled $7.85 billion (2019: $7.72 billion), a 2% rise.

SVL mentioned that, “lotteries performed creditably during the period achieving segment results of $1.7B. The increase in gross ticket sales by $468.27 million is the major reason for the positive performance.”

Additionally, the Group stated that, “the Sports betting segment reported results of $17.9 million and gross ticket sales of $717.1 million reflecting a positive uplift which was largely impacted by the cancellation of major leagues and tournaments during April to June quarter.”

“The Horse racing segment recorded losses of $206 million which was a direct result of the closure of the race track operations from March to June. While, PIN codes sales achieved an increase of 5% to reach $5.7B for year to date, thereby generating growth on segment results to achieve $125.1 million,” SVL stated.

Direct expenses recorded a decrease to close the period at $13.74 billion when compared to $14.74 billion for the same period in 2019. As such, gross profit for the period fell 2% to $3.80 billion (2019: $3.88 billion). For the quarter, gross profit closed at $1.51 billion (2019: $1.97 billion). Management noted that, “the decline is attributed to the reduced sales due to the impact of COVID-19 virus outbreak, which resulted in the closure of most our segments.”

Operating expenses grew 18% for the period to $2.38 billion (2019: $2.01 billion), while recording ‘Other income’ of $64.18 million relative to ‘Other losses’ of $16.03 million for the prior period in 2019. For the quarter, operating expenses amounted to $1.08 billion versus $1.06 billion booked in the previous comparable quarter.

Consequently, operating profit for the period decreased 20% to $1.49 billion relative to $1.85 billion reported in 2019. While, for the quarter, operating profit closed at $427.09 million (2019: $907.77 million).

Finance costs climbed to $81.22 million (2019: $43.06 million). As such, profit before taxation amounted to $1.41 billion, down from $1.81 billion in 2019. For the quarter, profit before taxation totaled $399.91 million (2019: $896.01 million).

Taxation for the period fell 15% to close at $479.76 million compared to $562.70  million in 2019, thus resulting in net profit of $928.96 million, a 25% decrease from the $1.25 billion recorded in the prior comparable period. For the quarter, net profit closed at $192.17 million (2019: $624.28 million).

Earnings per share totaled $0.36 versus $0.47 in the previous comparable period in 2019, while EPS for the quarter amounted to $0.08 (2019: $0.24). The twelve months trailing earnings per share amounted $0.81.  The number of shares used in our calculations 2,637,254,926 units. Notably, SVL’s stock price closed the trading period on July 30, 2020 at a price of $14.14.

Balance Sheet at a glance:

As at June 30, 2020, Supreme Ventures Limited had assets totaling $10.98 billion relative to $7.78 billion a year earlier. The increase was due mainly to an increase in ‘Property, Plant and Equipment’ and ‘Goodwill and Intangible Assets’ which closed at $2.37 billion (2019: $1.51 billion) and $3.45 billion (2019: $278.80 million), respectively.

Shareholders Equity attributable to owners of SVL amounted to $3.45 billion (2019: $3.53 billion) with a book value per share of $1.31 (2019: $1.34).

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