Supreme Ventures’ profit plunged in Sept Q
Supreme Ventures Limited (SVL) reported net income of $56.2 million over the third quarter ending September 30 2010, a 62 per cent decline from the corresponding period in 2009.
Total revenues increased over the comparative period last year by four per cent to $6.3 billion, boosted by a four per cent sales increase in lotteries to $5.4 billion, a 22 per cent increase in sales from PIN codes and phone cards to $506 million and a seven per cent increase in hospitality revenue to $30 million.
However, the company saw declines in VTL/slot drop revenue by seven per cent to $218 million, MoneyGram and remittance sales by seven per cent to $19 million and revenues from foreign exchange trading by 25 per cent to $18 million.
Although SVL managed to contain administrative expenses, which declined by 12 per cent to $513 million, a 10 per cent increase in direct expenses to $5.6 billion is primarily attributable to a major decline (53 per cent) in operating profits to $116 million at the end of the period under review.
Lottery prize payout, for example, increased by 12 per cent to $3.8 billion over the period, and was partly due to the addition of the Super Lotto, which was not in existence over the comparative period last year, and increased cash pot liabilities. Regarding the latter, the firm said that Cash Pot liabilities for the quarter was 74.3 per cent, which is above the game design of 72 per cent liability. Additionally, Government lottery tax was $293.4 million; CHASE Fund contribution was $59.9 million and lottery agent commission was $268.8 million for the period.
The firm added that operating expenses excluding depreciation and fixed assets impairment decreased by $20.9 million or 4.3 per cent for the period under review. Rental and utilities increased in accordance with rental agreements, as well as the addition of Acropolis Portmore.
“Despite the economic challenges faced during the third quarter, the company responded to many unbudgeted requests for financial assistance relating to back to school expenses and the effects of the adverse weather conditions that impacted many communities across the island,” said the company report.
