Zeal Network revenues drop 16% on weak jackpot environment
Lottery operator reports 16% revenue decrease for first nine months of 2019 after August pay-out of €26.3m
Zeal Network today reported a 16% decrease in revenue to €93.2m for the first nine months of 2019 due in part to paying out large jackpots.
The lottery operator described the period as having a “weak jackpot environment”, including an August pay-out of €26.3m, while the firm also underwent organisational changes as a result of the firm’s Lotto24 takeover.
Profits for the nine-month period nearly halved from €20.1m in 2018 to €10.8m in 2019, as EBITDA also dropped by 5.8% €28.3m.
Zeal Group billings – including Lotto24, which was fully consolidated from May 2019 – rose by 57% to €332.6m in the three quarters, or by 3% on a like-for-like basis.
The operator said fluctuations in revenue and operating income due to jackpot-related winnings should no longer occur after integrating the Tipp24 secondary lottery back into the German brokerage business, although negative effects on revenue and profitability are set to continue into Q4 2019.
Zeal Network CFO Jonas Mattsson
Zeal Network CFO Jonas Mattsson said: “We kept what we promised: We defined the new organisational structure, reduced the number of employees as planned, implemented the business model change, stopped the secondary lottery business and relocated the company headquarters back to Germany.
“The implementation of cost synergies is also proceeding according to plan. We are confident and look forward to continuing our recent success story with our future focus on the sustainable, continuously growing and socially valuable German lottery brokerage business,” he added.
The Zeal Network share price remained relatively unmoved at the time of writing.