The lottery behemoth, Allwyn International, witnessed a robust upswing in its earnings during the initial three months of 2022. The company’s chief executive, Robert Chvátal, remarked that Allwyn adeptly overcame the hurdles posed by subdued consumer spending.
Allwyn’s income surged despite the sluggish consumer spending witnessed in the first quarter.
Chvátal acknowledged that the overarching economic climate presented obstacles during the quarter, but these did not significantly impact revenue.
“We have observed a dip in overall consumer spending in recent months due to sustained inflationary pressures,” he elaborated. “However, our enterprise has thus far been minimally affected owing to our competitive pricing and low average expenditure on our offerings, coupled with our extensive base of devoted patrons.”
The enterprise attained gross gaming revenue of €869.3 million in the quarter, marking a 65% surge compared to the initial three months of 2021. Allwyn observed revenue growth across each of its markets.
Just over half of this revenue originated from Greece and Cyprus, where Allwyn maintains a 48.1% interest in lottery operator OPAP.
In these regions, revenue soared by 162.0% to €457.2 million, partially attributed to Allwyn augmenting its stake in OPAP during the quarter.
Austria, where OPAP holds stakes in Casinos Austria and Austrian Lotteries, generated €309.3 million – a 52% increase.
Revenue in Allwyn’s domestic market of the Czech Republic expanded by 7% to €102.8 million.
In a similar vein, income in each sector is displaying an upward trajectory.
Allwyn’s primary business remains digital lotteries, with earnings reaching €364.3 million, a 32% year-over-year rise. Instant lottery earnings expanded by 30% to €64.2 million. Sports betting income witnessed a substantial surge of 76% to €162.3 million, while online betting earnings climbed by 6% to €112.2 million.
Concurrently, revenue from video lottery terminals and casinos also experienced a notable increase, rising from €1.4 million to €166.3 million.
Following the deduction of slower-growing gaming taxes, net gaming income expanded by 89% to €534.4 million.
Chvatal remarked, “I am delighted that the initial quarter of 2022 was largely unaffected by the COVID-19 pandemic, with only Austria, Greece, and Cyprus, as well as certain operations in Italy, encountering limited COVID-related restrictions, most of which were lifted in the second quarter.” “The fully reopened physical retail channels in these markets performed well, while online sales continued to be robust across regions, with online channels contributing a record 43% of GGR in the Czech Republic.”
Operating expenses also escalated, but at a slower rate. The firm stated this was partially attributed to a successful restructuring plan executed in June 2020, which enabled the company to scale its operations at reduced costs post-COVID.
Consequently, EBITDA in the initial quarter of 2022 was more than twice that of the initial quarter of 2021, reaching €267.4 million.
Following depreciation and amortization, Allwyn’s operational profit achieved €206 million, a rise of 180% in comparison to the initial quarter of 2021.
The enterprise also paid €44.5 million in financing expenses and €32.6 million in levies, leading to a net profit of €128.9 million, nearly four times the earnings in the same period last year.
The quarter also witnessed three significant achievements for Allwyn. In January, the firm declared plans to combine with special purpose acquisition company (SPAC) Cohn Robbins Holdings Corp, enabling it to be listed on the New York Stock Exchange.
In March, the UK Gambling Commission declared that Allwyn would be the subsequent operator of the UK National Lottery, making it the first non-Camelot operator in the lottery’s history.
“I am very satisfied that we were chosen by the Gambling Commission in March 2022 as the preferred applicant for the fourth UK National Lottery license,” stated Chvatal.
However, the completion of this agreement was postponed due to a legal challenge by Camelot. The Technology and Construction Court heard the complaint on May 11 and 12, but has yet to deliver a verdict.
Finally, at the end of the quarter, Allwyn finished a rebranding from its predecessor Sazka, changing the name of all its businesses to reflect a more “worldwide” approach.
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