Playtech posts first half profit despite impact of store closures

Gambling software provider Playtech today released its half-year report June 30, 2021, highlighting the importance of the United States as the primary growth engine for the company.

Summary of financial statements

Sales for the first half of 2021 amounted to 457.4 million euros (563.5 million dollars), down 4% compared to the 476.7 million euros ($ 559.2 million) published in the first half of 2020. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) comes to 124.1 million euros (145.6 million dollars), up 13% on the 109.5 million euros ($ 128.4 million) for the respective 6-month period in 2020. This contributed to an adjusted after-tax profit of 54.6 million euros ($ 64 million), from only 3.5 million euros ($ 4.1 million) registered in the first half of 2020.

These results demonstrate the quality of our technology and products, the significant progress made against our strategic priorities and a broader dynamic in Playtech’s operations.

Mor Weizer, CEO, Playtech

The Americas Drive Growth

Playtech showcased the Americas as the main growth driver for the group, with revenue growth of 106% at constant currencies year-over-year, as its B2B online business in Latin America, Caliente, contributed to strong performance. Playtech Snaitech’s online business also performed well during the review period as the strong online performance was offset by the negative impact of store closures in Italy.

Playtech said its valuation tied to the group’s options in the Latin American, Caliente, Wplay and others deals holds an unrealized gain of € 299.9 million ($ 351.8 million) the fair value adjustment having a direct impact on the published result after tax.

In the US, Playtech described developments that continued in line with strategy when it launched in Michigan with Parx and entered into partnerships with Scientific Games and Novomatic, as well as continuing progress with bet365 and BetMGM in New Jersey.

B2B operations continue to be strong

The B2B gaming vertical recorded 16% revenue growth in the first half of the year for € 267.2 million ($ 313.4 million). In the United States and Latin America alone, sales increased to 46.4 million euros ($ 54.4 million) of 22.9 million euros (26.9 million dollars) in H1 2020, up 106%.

The B2B business segment also saw growth for Caliente in Mexico with a contribution from Wplay in Colombia, while new launches in Costa Rica and Panama will strengthen the company’s presence in the region. In Europe, Playtech has entered into a new strategic agreement with Holland Casino.

The segment has experienced strong growth in Live Casino and continued diversification, with over 50 new brands added to the software as a service (SaaS) company offer.

B2C activity on the rise

The B2C segment saw Snaitech deliver € 51.6 million ($ 60.5 million) in adjusted EBITDA, up from 47.1 million euros ($ 55.2 million) for the respective period in 2020, despite the impact of store closures, to establish itself as the leading retail and online sports betting brand in Italy.

Snaitech’s online revenue increased by 95% To 123.4 million euros (144.7 million dollars), while adjusted EBITDA is up 118% To 72.6 million euros ($ 85.2 million). The company also entered into an agreement for the sale of surplus land for 20 million euros (23.5 million dollars), most of which are expected to be received in installments in 2022.

The white label activity shows growth in EBITDA adjusted to 5.4 million euros ($ 6.3 million), from 3.4 million euros ($ 4 million) in the first half of 2020, while Finalto, the financial arm of Playtech, was accounted for as a discontinued operation with ongoing discussions with Gopher.