Canadian provincial lottery operator Loto-Québec has reported a 1.53% year-on-year increase in revenue for the first half of 2019, despite seeing a decline within its draw-based games business.
Total revenue for the 183 days to 30 September 2019 amounted to CAD$1.42bn (US$1.09bn), up from $1.39bn in the same period last year. Loto-Québec noted that the first half of last year was slightly shorter, based on the 177 days to 24 September 2018.
Casinos were the most popular form of gaming in the Canadian province in the first half of the year, with revenue coming in at $512.5m, up 5.3% from $486.7m last year.
Revenue from gaming– primarily video lottery terminals – was also up 3.0% year-on-year to $465.9m, boosted by ongoing growth with bingo and kinzo products, but lottery revenue slipped 3.7% from $467.0m to $449.8m.
Loto-Québec said that the decline in lottery was expected as sales of the Lotto Max were particularly high last year due to higher jackpot prizes. However, online lottery games revenue climbed from $14.4m in 2018 to $15.5m in the opening six months of this year.
Cost of sales was up slightly year-on-year from $241.5m in the first half of 2018 to $244.8m this year, while total costs increased from $426.8m to $430.3m. The rise in overall costs for the period was primarily due to higher spending on staff, with this climbing 6.6% to £213.9m.
However, Loto-Québec was able to make savings elsewhere, with depreciation costs down from $62.7m to $50.7m. General operating and administrative costs for lottery, casinos and gaming estbalishemnts were also all down year-on-year.
Despite higher spending in the first half, improved revenue meant gross profit for the six-month period was up 1.6% from $1.15bn to $1.17bn. Consolidated net income was also up from $721.6m to $736.0m for the first half.
“Since 2015-16, our total revenue for the first half, for a comparable number of days, increased by $127.2m, or 9.9%,” Loto-Québec president and chief executive Lynne Roiter said. “For the same period, thanks to tight management of our expenses, our consolidated net income increased by $110.3m (17.6%), to which all our sectors contributed.”
Confirmation of revenue and income growth in H1 comes after Loto-Québec in June revealed a 3.1% year-on-year increase in revenue to $2.83bn for its 2018-19 financial year, with the contribution from its igaming offering growing to $105.4m.