Opap Feels The Retroactive Tax Squeeze

By Brian Cullingworth, Last updated Sep 2, 2016

In tight economic conditions

Greek gaming operator OPAP S.A., in delivering its consolidated financial report for the six month and second quarter period ending June 30, 2016, said results were negatively impacted by the 35 percent retroactive GGR tax imposed from January 1 2016 and stringent economic conditions.
Key performance indicators include:
– Gross Gaming Revenue (GGR) was down 2.6 percent at Euro 678.8 million (H1/2015: Euro 697.1 million).
– Q2/2016 GGR remained broadly stable at Euro 338.1 million (Q2/2015: Euro 340.8 million), aided by the performance of lottery games and the increased y-o-y contribution of sports betting, counterbalanced by the drop of Instant & Passives.
– Net gaming revenue (NGR) was down 10 percent to Euro 279 million (H1/2015: Euro 310 million).
– Q2/2016 net gaming revenue amounted to Euro 125 million, down 17.7 percent (Q2/2015: Euro 341 million).
– EBITDA at Euro 161.5 million (H1/2015: Euro 186.4 million) and in Q2 2016 at Euro 68.5 million (Q2/2015: Euro 93.2 million) was negatively impacted by the increased retroactive GGR contribution of 35 percent since January 1, 2016.
– Excluding the increase of the GGR contribution, adjusted EBITDA in H1/2016 and Q2/2016 increased by 1.7 percent and 3.7 percent respectively y-o-y, on the back of Management's persistent cost containment efforts and one-off income of Euro 6.5 million related to legal provisions reversal, the company detailed.
– Adjusted Q2 2016 EBITDA margin was at 28.6 percent (Q2/2015: 27.4 percent)
– Net Profit came in at Euro 85.8 million (H1/2015: Euro 109.9 million) down 21.9 percent. Net profit in Q2/2016 reached Euro 33.0 million (Q2 2015: Euro 51.9 million). After adjusting for the increase of the GGR contribution, net profit in Q2 2016 stood at Euro 53 million, up 2.1 percent y-o-y.
"Our results for the second quarter of 2016 demonstrate a solid underlying performance despite the ongoing challenges we face from the economic environment," Damian Cope, chief executive officer of OPAP commented.
"Consumers continue to experience increased financial pressures and this is expected to continue for the rest of 2016.
"In addition, our overall profitability was heavily impacted by the recently increased GGR participation rate to the Hellenic Republic, which at 35% is materially higher than the European markets' norm".
"Despite this OPAP managed to report broadly stable revenue trends, while our focus on cost efficiencies led to a resilient operating result."
In closing, OPAP's board of directors announced the distribution of an interim dividend payable to shareholders of Euro 0.12 per share.

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