Online lottery platform provider NeoGames reported a 344.5% year-on-year increase in net profit to $6.7m for the first half of its financial year, partly due to the ongoing success of its NeoPollard joint venture.
Revenue for the six months to 30 June amounted to $26.2m, up 18,6% from $22.1m in the same period last year.
Revenue via royalties from turnkey contracts was the main source of income, with revenue here rising 11.8% to $16.1m. Games contracts revenue climbed 22.4% to $979,000, while revenue from the use of IP rights also increased 24.9% to $3.9m.
The largest rise in revenue came courtesy of the provider’s NeoPollard joint venture with Canada’s Pollard Banknote, with revenue here jumping 113.5% year-on-year to $3.7m.
However, while expenses were 32.0% higher at $22.3m for the period and left a reduced operating profit of $3.9m, down 23.5% year-on-year, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) jumped 53.9% to $18.0m.
After taking into account $2.6m in financial expenses, pre-tax profit stood at $1.3m, down 50.0% on last year, while after paying $1.1m in tax, this left $202,000 in profit after tax, a drop of 90.8% year-on-year.
However, after accounting for this, NeoGames then included an additional $6.5m in profit from its joint ventures, such as NeoPollard, on top of the amount of income included in its revenue figures. This meant it was able to end the half with a comprehensive profit of $6.7m, up 344.5% from 2020.
Looking to the second quarter, revenue edged down 0.8% year-on-year to $12.9m. This was mainly due to a 17.4% drop in revenue via royalties from turnkey contracts to $7.6m, with this being partly offset by increases in games contracts revenue, IP rights revenue and NPI revenue, with the latter jumping 90.0% to $1.9m.
Costs were 22.0% higher at $11.1m, meaning operating profit slipped 56.4% to $1.7m, but adjusted EBITDA increased 6.4% to $8.3m.
NeoGames reported $1.2m in finance costs, resulting in a pre-tax profit of $508,000, down 80.9% year-on-year, while $412,000 in tax payments saw profit after tax reach $96,000, a drop of 97.3%.
However, after including the $2.7m in profit it received from its share in the joint venture, comprehensive profit for the quarter amounted to $2.8m, which was 16.1% up on last year.
“We are increasingly encouraged by the performance and development of the various markets and customers we support, notwithstanding expected seasonal impacts during the quarter,” NeoGames chief executive Moti Malul said.
“Our substantial growth and strong performance over the past year gives us confidence that we are well positioned to maintain our position as the premier innovator and provider of ilottery solutions to the global lottery industry.
“As we continue to prove the effectiveness of our offering in engaging and maintaining players as well as enabling state and local governments to generate more revenue they can deploy for public benefit.”