Czech gaming company Sazka Group experienced a boost in its financial performance during the third quarter of the year, as countries began to ease their Covid-19 restrictions. The recovery of its land-based operations, coupled with the continued success of its digital operations, contributed to a 98.1% year-on-year growth in total stakes for the three-month period ending on September 30th, reaching €2.61bn (£2.37bn/$3.18bn).
The full consolidation of Casinos Austria as a subsidiary from June 26th played a significant role in this growth, contributing €303.0m to the gross gaming revenue of €768.9m, which was 66.1% higher compared to the same quarter in the previous year. Additionally, the decline in draw-based and instant lotteries from Greek operator OPAP was offset by the growth of sports betting and video lottery terminals.
Despite the easing of Covid-19 restrictions, the strong momentum in online sales, including traditional products and digital-only games, was maintained. Sazka Group considers online sales a major strategic focus, and the changes in customer behavior observed during the pandemic are expected to bring long-term benefits.
Gaming taxes more than doubled to €313.1m, primarily due to the consolidation of Casinos Austria. This resulted in a net gaming revenue of €455.9m, a 43.8% increase. The company also generated additional revenue of €50.4m from the sale of non-gaming products in its retail outlets, and €11.4m in other operating income from sources such as deferred taxes.
However, the rise in revenue led to an increase in operating costs, particularly personnel expenses, which grew from €25.6m to €82.9m. Consequently, operating profit decreased by 15.0% to €96.0m, after accounting for €46.7m in depreciation and amortization charges and €53.9m in restructuring costs related to the ongoing reshaping of Casinos Austria.
Although profit from equity investments, such as the Italian lottery business, fell by 30.1% to €23.5m, EBITDA increased by 37.5% to €196.6m compared to Q3 2019. After factoring in net finance costs of €31.0m, the company recorded a pre-tax profit of €65.1m, representing a 31.9% decline compared to the previous year. Net profit for the quarter amounted to €48.5m after the deduction of €16.6m in income taxes, a decrease of 32.6% compared to the prior year.
For the nine months leading up to September 30th, total wagers increased by 14.0% to €4.46bn, while gross gaming revenue reached €1.42bn, a slight increase. However, after accounting for gaming taxes, net gaming revenue decreased by 6.1% to €884.6m.
Despite the challenges posed by Covid-19 restrictions, Sazka Group remains confident in its ability to navigate through the situation. The company’s diverse geographic exposure, game portfolio, and strong online sales position it well for future growth.
