Revenue for the third quarter of 2021 grew to HK$67.0m (£6.4m/€7.5m/$8.6m) – almost as much as it generated in the first six months of the year.
The bulk of this came from lottery hardware sales and services, which accounted for HK$39.1m of the total, with a further HK$9.5m from lottery distribution via physical channels and ancillary serivces.
From the lottery games and systems segment, AGTech generated revenue of HK$10.0m from games and entertainment and HK$8.4m from non-lottery hardware sales and services.
This increased revenue, coupled with a slight decline in operating costs, saw the supplier’s operating loss reduced to HK$10.2m for the quarter, compared to HK$18.9m in Q3 2020.
Its bottom line was aided by HK$3.6m in gains from changes in the fair value of financial assets held by AGTech, and HK$3.9m in net finance income. This resulted in its pre-tax loss narrowing to HK$2.7m. A HK$9,000 income tax credit meant its net loss also came to HK$2.7m, a significant improvement from the prior year’s losses of HK$47.1m.
An improved Q3 performance meant that for the nine months to 30 September, AGTech’s revenue was up 36.0% to HK$144.9m.
Over this period, Chinese Ministry of Finance figures showed that lottery sales amounted to RMB278.5bn, a significant improvement on 2020, when the market was badly affected by the Covid-19 pandemic.
With the market recovering, AGTech won 20 lottery hardware tenders to supply lottery terminals to Sports Lottery Administration Centres over the first three quarters of the year.
“These successful tenders further strengthened the group’s top-tier position in China’s lottery hardware market and demonstrated the continued competitiveness of the group’s lottery terminals,” the supplier noted.
“Despite ongoing headwinds and uncertainties with regard to the Covid-19 situation globally, we have seen a steady recovery in the PRC market since lottery related activities resumed,” it added. “The group will proactively transform and build on our leading position within the Chinese lottery industry.”
The lottery hardware division also accounted for the bulk of year-to-date revenue, at HK$78.8m, with a further HK$28.8m coming from distribution services.
This was complemented by expansion into other consumer sectors, such as point-of-sale terminals for the Chinese retail market. Launching in 2021, this division brought in revenue of HK$17.1m for the year to date.
In addition, AGTech’s games and entertainment revenue totalled HK$20.1m for the nine-month period. Its India-facing mobile gaming and entertainment platform Paytm First Games contributed HK$18.1m of this sum.
After operating costs, the supplier’s operating loss for the first three quarters was slashed from HK$124.5m to HK$65.3m, while reduced losses on investments helped cut pre-tax losses down to HK$48.3m.
Once HK$1.9m in taxes were factored in, AGTech’s net loss for the nine months to 30 September came to HK$46.3m, compared to a HK$156.9m loss in Q3 2020.
Original article: https://igamingbusiness.com/agtech-cuts-q3-losses-as-chinese-lottery-market-recovers/
