OPAP, 34% owned by the Greek government, reported third quarter results today. The monopoly operator saw sales slip 11% from the same period last year to €1 billion, while net revenues are down 18% in the first three quarters of 2011.
Greeks have spent less gambling amid austerity measures that have cut wages and pensions, as their debt-saddled government desperately tries to avoid default.
Third quarter profits were down 16% to €135 million, while net income for the first nine months of the year was €409 million, down 1% from the same period last year.
OPAP has been slashing costs. Advertising and sponsorship spending was cut by 54% and 25%, respectively, and administrative expenses were reduced by 8%.
“Despite the challenging economic environment, we achieved healthy margins by further containing costs, increasing our market share and improving our operational efficiency,” said chief executive Ioannis Spanoudakis in a statement.
Europe’s biggest betting operator, which has a market value of about €2 billion, did not announce an interim dividend for the first time since listing in 2000.
Earlier this month OPAP gained approval from shareholders for a videolotto license and a 10-year extension of its monopoly. The Greek government also granted the company exemption from the 30% gross profit tax on online products. The move is undoubtedly an attempt by Greece to boost OPAP’s value ahead of the sale of its stake in Europe’s biggest betting operator next year.
The Greek government has been using OPAP as a cash cow to boost state coffers. The company agreed last month to pay €935 million to the government for the licence deal and contact extension, of which €849 million is expected to be used to pay down national debt. The betting giant also secured shareholder approval for a loan of up to €600 million to finance the deal.
Debt-saddled Greece has been divesting assets in order to continue receiving bailout aid from the International Monetary Fund and fellow EU member states. Under the terms of the EU/IMF bailout plan, Greece must raise €50 billion by 2015 from selling stakes in state firms and other assets to help to pay down a debt mountain expected to reach 162% of GDP this year.
The Greek government announced in late October that it will delay the sale of its stake in OPAP, initially planned for the fourth quarter of 2011, until next year.