Posted May. 7, 2008
By Susan A. Baird
PBN Web Editor
ROME and PROVIDENCE – Lottomatica S.p.A. and subsidiary GTECH Corp. reported a first-quarter profit of $84.6 million (€55.4 million), an increase of 23.1 percent from the year-ago $69.2 million (€45 million), on total revenue that rose 3.2 percent to $691.2 million (€448.5 million). Earnings per share rose to 43 cents (€0.28) from the year-ago 35 cents (€0.23).
The company credited a reduction in the effective tax rate in Italy, the strengthening of the euro against the U.S. dollar and “the natural hedge of the company’s capital structure, which is primarily U.S. dollar-denominated debt.”
“The good financial performance of the Group in the first quarter was driven by our core lottery business and innovative growth in new markets,” said Chief Financial Officer Stefano Bortoli. “In the United States, GTECH’s results were impacted by the translation effect of the euro-dollar exchange rate but the business continues to perform strongly. We remain on track to deliver on the targets set out in our 2008-2010 strategic plan.”
Revenue from Lottomatica operations amounted to $389.7 million (€253.3 million), a year-over-year increase of 20.2 percent, the company said.
GTECH revenue amounted to $300.3 million (€195.2 million), including $270.7 million (€176.1 million) from the lottery segment and $29.4 million (€19.1 million) from gaming solutions, Lottomatica said.
Excluding currency fluctuations, GTECH first-quarter revenue fell 2.2 percent, the company said. But revenue from continuing operations – excluding the year-ago contribution from PolCard SA, the Polish debit, credit and ATM card issuer GTECH sold on Aug. 1 (READ MORE) – rose 1.9 percent.
Highlights of the quarter for GTECH included the signing of a four-year software contract extension with Veikkaus Oy, the operator of the Finnish National Lottery; and the acquisition in January of a 50-percent controlling interest in the Atronic group of companies. GTECH expects to acquire the other 50 percent sometime this quarter, Lottomatica said.
Last month, GTECH and newly-acquired subsidiary Boss Media were chosen by Veikkaus to provide a platform and services for a nationwide Internet bingo game.
The second quarter also has seen the signing of a six-year contract for lottery technology and services with the Michigan Lottery; the selection of GTECH and its Spielo subsidiary by the Kansas Lottery to operate a central gaming system that will monitor electronic gambling at six facilities in the state; and on May 2, the launch with Taipei Fubon Bank and the Hong Kong Jockey Club of the first legal sports lottery in Taiwan.
“Lottomatica Group has delivered a solid performance in the first quarter of 2008,” Chairman and CEO Lorenzo Pellicioli said in a statement. “In Italy, our lottery business continues to achieve strong results and we are seeing further growth in new markets. In the United States, GTECH has signed some important contracts this quarter, such as the Michigan Lottery, and recent acquisitions are being successfully integrated. [And] in the international gaming market, the recent launch of a sports betting network in Taiwan will help to reinforce Lottomatica Group as a global player.”
GTECH Corp., a wholly owned subsidiary of Lottomatica S.p.A. (Italian Stock Exchange: LTO) has provided lottery technology and services to the R.I. Lottery since 1978. CGI has been providing instant-ticket printing services to the R.I. Lottery since 1997. Lottomatica is a €1.7 billion commercial lottery operator and gaming technology and services company ($2.6 billion at today’s exchange rate) with 5,900 employees in more than 45 countries. More information is available at www.gtech.com.
