SVL's Q2 Earnings Flat, But 6M up 14.0%

  • For the second quarter ending June 2026 (Q2 2026), Supreme Ventures Limited’s (SVL’s) reported net profit attributable to stockholders was relatively flat at J$777.1Mn versus J$784.4Mn for Q2 2025. Higher finance costs and a higher tax charge absorbed an otherwise stronger operating performance.
  • Q2 total gaming income advanced 4.8% or J$673.5Mn to J$14.67Bn, driven by its core segments. Sports betting grew 9.1% year-over-year on higher ticket sales, PIN codes rose 6.6%, and the lottery segment grew by 0.8% despite prize payouts exceeding 70% of sales.
  • Direct costs rose at a slightly faster 5.0% to J$11.34Bn, leaving gross profit up 4.1% at J$3.34Bn. Q2 selling, general and administrative expenses were broadly flat at J$2.24Bn (+0.4%), despite continued business expansion. Combined with a 130.7% jump in other income to J$153.2Mn, this lifted Q2 operating profit 16.5% to J$1.30Bn and pushed the operating margin to 8.8% from 7.9%.
  • However, below the operating line, finance costs increased 29.0% to J$270.0Mn in the quarter and 22.6% to J$526.8Mn for the six months, following a bond refinancing undertaken to support the Group's growth initiatives. Taxation was a larger drag, rising 95.7% to J$247.6Mn and taking the Q2 effective tax rate to 24.2% from 14.0%. Management expects finance costs to ease over the medium term as principal balances on the Group's amortising debt continue to decline.
  • With Q2 earnings flat, 6M 2026 earnings grew 14.0% to J$1.48Bn. 6M Revenue grew 4.7% to J$29.14Bn, with management attributing the increase primarily to a J$580.19Mn rise in sports betting and a J$193.72Mn rise in lottery revenues. Direct costs rose 4.88% to $21.47Bn while operating expenses totalled J$4.54Bn (+2.19%) and finance costs were up 22.7% to 526.79Bn.
  • Looking ahead, Supreme Ventures Fintech Limited (SVFL) has pulled forward the commercial launch of its Evo Cash digital wallet and Mastercard-backed prepaid card to the third quarter of 2026, from a previously anticipated year-end launch. The solution is being tested in the Bank of Jamaica's Regulatory Sandbox and targets Jamaica's unbanked and underserved communities. The Group is also expanding self-serve kiosks in select retail locations and has BOJ approval for an additional 10 remittance locations over the next month, taking its network to 55. Lastly, expansion in Ghana remains a potential major growth engine, which management expects to double local earnings if it can increase its market share from approximately 2.0% to 5.0%.
  • Near-term risks are largely cost and consumer-related. Prize payouts above 70% and direct costs growing ahead of revenue leave gross margins thin, while the recovery from Hurricane Melissa, which struck in October 2025, is still in progress, with sales as at June 30, 2026 only 1.5% ahead of the prior year. Elevated finance costs and a normalising tax rate could also pressure margins in the near term.
  • As at the close of trading on July 30th, SVL shares were J$18.24, a 5.6% year-to-date increase. At this price, the shares trade at a P/E of 23.61x.

(Sources: Supreme Ventures Limited Financial Statements & NCBCM Research)