AGTech cuts losses despite H1 revenue decline
Alibaba Group-owned lottery equipment supplier AGTech’s revenue for the first six months of 2020 came to HKD$43.9m (£4.3m/€4.8m/USD$5.7m), down 8.0% year-on-year, though the business reduced its losses for the period by 12.1%.
Revenue from lottery hardware fell 34.6% to $12.5m, while revenue from its games and entertainment division was cut in half to $1.0m.
Lottery game and system revenue increased, however, by 24.5% to $24.3m, thanks mostly to an increase in sales of virtual sports lottery games after the Chinese lottery market reopened following the novel coronavirus (Covid-19) in the second quarter of 2020. In the first half of 2020, China’s overall lottery revenue came to CNY123.90bn, down 41.7%.
The supplier made an operating loss for the period of $105.6m, down 12.1% from H1 2019’s loss.
During the first half of 2020, AGTech won five tenders to supply lottery hardware in the provinces of Anhui, Shanxi, Jilin, Hubei and Guizhou.
“The group will continue to pursue tenders to supply to the lottery and other hardware market and bid for new contracts after resumption of tenders post Covid-19 delays,” AGTech said.
AGTech added that it believes the transformation of the retail industry that may occur due to the impact of Covid-19 offers a new opportunity rather than a risk to its business.
“[The] transition to new retail models presents a great opportunity for the further development of the Group’s hardware business,” the supplier explained.
“Many of the hardware supplies required under these new retail concepts share similar technology and components that underlie the lottery hardware products supplied by the group throughout the years.
“We believe our hardware division continues to be well positioned to take advantage of such opportunities in the foreseeable future.”