SVL Reports Marginal YoY Decline in Net Profit

  • Supreme Ventures Limited reported a marginal decline in net profit of 0.7% to $1.54Bn (EPS: $0.58) for the nine months ending September 30, 2021. This came on the back of a rise in selling and administration expenses, which outstripped the rise in total gaming income. 
  • Gaming income for the period grew 13.5% (or $3.77Bn), driven by the lotteries segment. The sports betting segment also saw year on year growth given the attractiveness and flexibility of participating in gaming activities, enhanced with the use of mobile platforms and the support of the ecommerce platform. 
  • The Group continues to focus on expanding channels and terminals, which have been well received by the marketplace. SV Games (Mobile/Online) has seen exponential growth in both usage and the number of active online users, due to the increased number of games that can be played on the platform, as well as strong promotional and product enhancement activities. The expansion of the Supa Sellaz program has provided an additional sales channel for both the company’s customers and third-party retailers. 
  • However, the impact of strong topline growth was eroded by a 23.0% rise in selling, general and admin expenses, which may have been as a result of SVL’s strong promotional activities. 
  • New products will be launched through the retail channel as the company provides continuous opportunities to grow with its retail partners. SVL’s Guyana market is showing steady growth. Furthermore, management noted that, the improvements in the horse racing product and operations using technology and new product solutions promise to create a profitable, sustainable business for the first time in the history of Caymanas Park. These opportunities will in turn support an improvement in the company’s bottom-line, especially as economic activity in its operating territories recover. 
  • SVL’s stock price has appreciated by 0.95% since the start of the year and closed Tuesday’s trading session at a price of $17.78 per share. At this price the stock trades at a P/E multiple of 19.9x.

(Source: SVL Financials & NCBCM Research)