SVL Q1 2025 Results Slips

• Despite a moderate increase in total gaming income (+3.87% YoY), Supreme Ventures Limited’s (SVL’s) earnings declined by 41.56% to $508.29Mn for Q1 2025. The decline was largely driven by a disproportionate spike in operating expenses.
• A 5.0% rise in income from fixed-odd wagering games and a 3.3% increase in revenue from non-fixed-odd wagering games, horse racing, and pin codes resulted in total gaming income rising to $13.83Bn from $13.31Bn.
• Direct costs rose by 3.8% to J$10.67Bn in Q1 2025 due to higher sales volume, but gross profit still improved by 6.4% to reach J$3.16Bn, reflecting efficiency in cost containment relative to revenue growth.
• That said, a sharp 33.4% increase in operating expenses, which jumped to J$2.21Bn in Q1 2025, was the main contributor to lower earnings. In addressing the jump in operating expenses, group chairman Garry Peart noted that depreciation following increased CAPEX –driven primarily by capital work in progress, motor vehicles, lottery equipment and leasehold equipment – and the absence of a write-back drove the increase. “Last year, the reported figure was about $1.6 billion, but that included a $300 million write-back. So, if we adjust for that, the true base was closer to $1.9 billion. On that basis, the year-over-year increase is actually more in the range of 10 to 12%...”, said Peart on SVL’s Q1 2025 investor briefing.
• Despite the rising costs, Management remains optimistic about the long-term growth of the business, pointing to several of its ventures, most notably its Fintech and Ghana expansions that are approaching break-even.
• At the market close on Tuesday, SVL’s stock price was J$19.93, down 19.41% since the start of the year. At this price, SVL trades at a P/E of 36.14x, which is above the Main Market average of 13.32x.

(Source: SVL & NCBCM Research)