Cost-cutting measures offset decline in OPAP revenues
Greek monopoly's revenues continue to fall in Q3 2011, though reduction of distribution and administrative expenses prevent major drop in profit.
OPAP has posted an 11.4% year-on-year drop in revenues its Q3 figures, which fell from 1.1346bn in 2010 1.0048bn, leading to an overall 17.6% drop in revenues for the first three quarters of 2011.
Despite the drop in revenues, net profit for the first nine months of the year was 409.1m, only 1% down on a profit of 413.1m in the same period last year. However, profit for the quarter was down 16% to 135.4m from 161.2m.
Revenues from its Total Betting range dropped by 19.3%, a loss attributed to the lack of major sporting events in the period, though partially offset by revenues created by the new Go Lucky and Monitor Games products. Meanwhile OPAP’s main numerical games product kino managed to slow its decline, with revenues decreasing by 14.4%, after falling 16.3% in Q2 2011.
The fall in revenues could be attributed to a significant drop in distribution expenses, with advertising and sponsorship spend reduced by 54.2% and 25.3% respectively, as the operator looks to cut costs. Administrative expenses were also lowered, dropping 7.7% to 6.4m due to a reduction in personnel costs.
The Q3 figures are the first released since OPAP held an extraordinary general meeting at the beginning of the month, where shareholders agreed to extend its monopoly by ten years, and saw the Greek govenrment grant the company exemption from the 30% gross profit tax on online products. This is expected to increase its value when the Greek government is likely to sell its 34% stake in the operator next year.