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Loto-Québec revenue falls 51.4% in Covid-hit first half


Canadian provincial lottery and gaming operator Loto-Québec saw its revenue for the first half of its 2020-21 fiscal year fall 51.4% year-on-year, after operations were disrupted throughout the first quarter by novel coronavirus (Covid-19). 

Revenue for the six months to 28 September came to CA$687.4m (£400.2m/€443.8m/$517.0m), with retail lottery sales suspended due to Covid-19 from 23 March. 

March also saw its land-based gaming establishments, such as casinos and gaming halls close. They remained shuttered throughout the first quarter, not beginning to reopen until June and July. 

As such, the biggest declines in the first half were recorded casinos and venues (such as bingo halls and bars hosting gaming machines), which saw revenue fall 64.9% to $179.9m, and 62.7% to $174.0m, respectively. 

With retail lottery sales resuming earlier, from 4 May, the decline in that vertical was not as pronounced, though revenue was still down 25.5% at $335.3m. Inter-company sales, meanwhile, fell significantly to $1.7m. 

Online gambling, which Loto-Québec announced as a core focus amid the retail lottery suspension, performed strongly. The channel accounted for $60.9m of lottery revenue – up 292.5% – and $105.6m of casino revenue, up 131.6%.

The decline in revenue led to cost of sales for the period falling to $134.5m, a 45.0% decline. This largely stemmed from declines in costs related to venues, which dropped 63.0% to $44.5m. 

This left a gross profit of $552.9m, down 52.8%. Other operating costs, however, declined at a slower rate than revenue, falling 14.4% to $368.4m.

As a result, operating profit for the six months to 28 September was down 75.1% at $184.5m. Once net finance charges of $3.3m were factored in, net profit for the period came to $181.2m, a 75.4% year-on-year drop. 

For the second quarter revenue was down 30.2% to $530.0m, with a marginal decline in lottery revenue (to $230.6m), coupled with steeper drops in casino and venues’ contributions. Cost of sales came to $102.6m, leaving a gross profit of $427.4m, down 32.0%. 

After costs of $180.2m (down 20.8%), operating profit came to $247.2m, and after $1.7m in net finance expenses, net profit for the quarter fell 38.4% to $245.5m. 

However, following the end of the reporting period, Loto-Québec has once again had to shutter some of its land-based facilities amid a resurgence in Covid-19 cases. This has seen gaming halls, video lottery terminals facilities as well as the Casino de Montreal, Casino du Lac-Leamy and Casino Charlevoix shut their doors.