Amid forecasts that the Eurozone could contract by up to 10.2 per cent because of the pandemic, Austria’s Novomatic group saw revenues fall for the first half of 2020.
The interim financial report to June 1, 2020, showed a fall in revenues from €1.25bn to €805.4m or 36 per cent.
The total number of operated locations declined by 30 to around 1,940 sites, mainly due to regulatory issues and also economic decisions in individual markets. Due to partial closures the number of operated gambling devices totalled 41,500. The decline, says the company, was mainly due to the regulatory framework in Germany leading to a gradual reduction in locations and machines.
It said that in Italy legal changes in the first half of this year was impacted by a rise in gaming tax to 8.5 percent of the stake for VLTs and 23.9 percent for AWPs. In the UK the maximum stake for fixed-odds betting terminals in bookmakers’ shops was reduced from £100 to £2, resulting in the closure of many bookmaking shops, but it has also had a positive impact on the revenue development in adult gaming centres.
The first half of the year saw Novomatic’s EBITDA decrease to €1.3bn, a fall of 56 per cent against the previous year. Operating profit declined from €51m to minus €98.6m, a fall of 293 per cent.
“The drastic, necessary government measures, that from the beginning of March onwards had spread from Italy to the whole of Europe in a very short amount of time, also had a significant impact on Novomatic’s business,” the company stated.
The utilisation of its credit line of €1bn stood at €440m at June 30, 2020, said the company.
Consolidation, however, continued. The group sold its Otium group and several small investments in various markets, together with the sales of shares in Casinos Austria that was completed on June 26. It also sold its shares in HTL Montenegro d.o.o. and its subsidiary MNA Gaming d.o.o.
The report showed that during the first half of 2020, the group’s revenues declined by €454m and the fall was across most markets. Italy was €102.8m down, Eastern Europe down by €71.2m, Austria €61.3m, other markets €54.3m and the UK €52.3m, Spain €48.6m and the Netherlands by €23.6m.
“Due to the far-reaching lockdown measures, that almost completely interrupted the operation of slot arcades, casinos and betting sites for about two months, the online segment was able to achieve a significant increase, €31.4m,” the report stated.
However, the company reported that EBITDA was €131.2m for the six months, remaining positive despite the pandemic and the closure of almost all operational sites.