May 2010 Financial News

SVL sees 63% increase in net profit

May 19, 2010

DESPITE a difficult year and the challenges of reduced consumer spending, gaming and hospitality company Supreme Ventures Limited, realised a 63 per cent increase in net profit to $167.4 million for the first quarter, ended March 31, 2010 over the $102.4 million of the corresponding quarter of 2009.

President and CEO of SVL, Brian George said in a statement on the financial results that the increase in net profit shows that "the company continues to enjoy strong public support for its products and services".

He said an overall increase in revenue of $56 million compared to the quarter of 2009, at which point total revenue was $6.35 billion, is indicative of this support and a "very positive achievement in the current economic climate".

However, earlier this month, George said that SVL was being challenged to continue to stimulate interest in its lottery games because of the global saturation of the lottery market. George said that players of the lottery had become more mature, demanding larger jackpots than those currently offered.

"...20 years ago if you heard about a $20-million jackpot you had lines down the street," George said at a meeting of the American Chamber of Commerce (AMCHAM) earlier this month.

"Now people don't care. It takes in the United States about US$300 million to get the market truly excited. Now that is beginning to become saturated so it may take another substantial coalition of lotteries to be able to get people really excited."

While SVL has its own consolidated lottery, the Super Lotto, there has not been a winner so far. However, a win in the local Lotto Game of $240 million, the highest ever in the history of the jackpot was claimed within the first quarter.

Nonetheless, when compared to the year-earlier levels SVL's revenue from the lottery segment decreased by $27 million to $5.6 billion during the review period. Segment results, however, show a 7.2 per cent increase in profit for the March 2010 quarter from $237 million to $255 million, bolstered by a corresponding 7.5 per cent reduction in the amount paid out in prizes, the total claims on lottery prizes moving from $4.1 billion in the March quarter of 2009 to $3.8 billion during the three months to March 31, 2010.

The tenuous nature of the lottery segment aside, the largest percentage increase in revenue for SVL came from its pin codes and phone cards sales, with an increase of 27 per cent to $479 million compared to March 2009 at which point, pin codes revenue was $376 million.

Losses continued, however, in its gaming and hospitality segment, which incorporates room, restaurant and bar related guest services provided through the Acropolis gaming lounges. Losses were lowered from $94.3 million for the March 2009 quarter to $62.2 million in the March 2010 quarter.

The financial services segment, which comprises foreign exchange dealer services and commissions from Money Gram services also posted losses of $506,000 for the quarter under review. According to George, this loss was attributable to expenditure on constructing a corporate office at the CitiGroup, New Kingston building. Additionally, SVL reports that the appreciation of the Jamaican dollar relative to the US dollar resulted in decreased spreads in foreign exchange trading, further contributing to the losses. Foreign exchange losses were $817,000 at the end of the quarter, compared to a gain of 6.8 million at the quarter of 2009.


Source:
Jamaica Observer
Wednesday, May 19, 2010

http://www.jamaicaobserver.com/business/SVL-sees-63-increase-in-net-profit_7623153