SVL posts 9% increase in total gaming income for the second quarter

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).

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein