Revenue rises but earnings fall in mixed 2024 for Intralot

Intralot Reports Mixed Results for 2024 Fiscal Year: Revenue Grows but Profits Decline

Intralot, a key player in the global gambling and lottery industry, released its financial performance report for the fiscal year ending December 31, 2024. The report indicates a modest revenue increase of 3.4%, bringing total revenues to €376.4 million (£315.0 million/$406.9 million), surpassing the previous year’s figures as highlighted in the announcement on March 31.

Furthermore, the company saw a slight uptick in gross gaming revenue (GGR), which rose by 2% to €355.5 million. Lottery games remain the cornerstone of Intralot’s revenue strategy, accounting for 54.8% of total income in 2024. Sports betting followed at 23.1%, while video lottery terminals (VLTs) represented 11.3%, and technology contracts contributed 10.7%.

Significantly, the fourth quarter of 2024 was particularly robust, marked by a remarkable 34.3% increase in revenues to €112.8 million. The GGR during this period surged 22.4% year-on-year, reaching €105.8 million, primarily propelled by strong performances from subsidiaries in the US, Turkey, and Argentina. However, challenges in Taiwan due to implementation fees and a less favorable contract renewal in Morocco somewhat offset these gains.

Easing Concerns Over Argentina’s Market Dynamics

Intralot’s analysis of its performance spotlighted the revenue growth attributed to its B2B management contracts, particularly in Turkey, where the company successfully navigated an 11.1% devaluation of the Turkish lira throughout 2024. Conversely, revenue declines in Morocco were noted following the renewal of contracts with diminished values.

On a more positive note, Intralot showed optimism regarding its B2C licensed operations in Argentina, reporting a significant revenue increase of 30.1%, or 55.2% when adjusted for local currency fluctuations. This rebound in Argentina follows a challenging previous year marked by a severe 50% devaluation of the local currency following government changes in December 2023.

Despite these successes, revenue sourced from B2B technology and support services contracts experienced a 3.1% decline year-on-year. Intralot attributed this decrease to the implementation fees charged in Taiwan, which impacted results in 2023, and noted that this drop was partially offset by organic growth across major markets.

Decline in Bottom-Line Profit: A 5.8% Drop

While revenue figures improved, Intralot faced challenges on the profitability front. Gross profit decreased by 2.7%, landing at €141.3 million. Additionally, other operating income fell by 1.5% to €29.9 million. As operational expenditures increased by 3.0% to €117.5 million, EBITDA fell by 3.7% to €124.7 million, although adjusted EBITDA rose slightly by 1% to €130.7 million. The adjusted EBITDA margin experienced a contraction from 35.6% to 34.7%.

After accounting for depreciation and amortization, EBIT diminished by 16.6% to €51.3 million. Consequently, pre-tax profit, inclusive of interest and exchange differences, plummeted to €18 million, reflecting a decrease of 46.2%. Bottom-line net profit, referred to as net income after tax and minority interest (NIATMI), stood at €4.9 million, falling short of the prior year by 16.5%.

Q4 Results: Positive Trends Amidst a Mixed Year

Focusing on Q4 results paints a more optimistic picture, with operational costs reduced by 7.3% to €34.9 million. EBITDA for the quarter surged by 16.7% to €33.2 million, and adjusted EBITDA increased by a remarkable 38.0% to €39.3 million. EBIT saw an impressive 56% rise, reaching €14.2 million, while pre-tax profits skyrocketed by 419% to €7.5 million. Despite these gains, Q4 bottom-line net profit (NIATMI) declined by nearly 50% to €1.6 million.

CEO Sokratis Kokkalis remarked on the company’s performance, attributing the fourth quarter’s success to a significant revenue boost from North American operations. He noted, “Our focus on high-margin activities has allowed us to sustain essential profitability metrics and leverage ratios.” He further highlighted Intralot’s success in securing new contracts, particularly in VLT monitoring in the US and online lottery sectors in Canada, while reinforcing key contracts in their core European and Australian markets.

Looking Forward: Future Prospects for Intralot

As we head into 2025, Intralot’s management maintains a positive outlook toward the group’s future. The company emphasized its dedication to technological innovation, strategic partnerships, and operational efficiency, which facilitate adaptability in fluctuating market conditions.

“With our strong presence in pivotal international markets and a continuous emphasis on digital transformation, we are well-positioned to capitalize on emerging opportunities in the evolving gaming landscape,” the earnings report concluded.

“By leveraging our expertise in next-generation gaming solutions, we aim to elevate player engagement, enhance our global market presence, and create sustainable long-term value for our stakeholders.”