KUALA LUMPUR: Sports Toto Bhd's net profit fell 62.7 per cent to RM24.22 million in the second quarter (Q2) ended Dec 31, 2023, from RM64.86 million last year, mainly due to lower sales, higher prize payouts, and higher operating expenses.
In its filing with Bursa Malaysia Securities Bhd today, the company said its revenue fell 2.8 per cent to RM1.36 billion in Q2 2023 from RM1.41 billion a year ago due to the results reported by STM Lottery Sdn Bhd (STM Lottery) and H.R. Owen Plc (H.R. Owen).
For the current quarter ended December 31, 2023, STM Lottery reported a drop in revenue of 6.3 per cent primarily due to a lesser number of draws conducted, 42 versus 48 draws in last year's corresponding quarter.
H.R. Owen's revenue was down by 4.8 per cent in the current quarter as compared to the previous year corresponding quarter.
"However, with the favourable foreign exchange effect, it reported an increase in revenue of 2.4 per cent when converted into Ringgit Malaysia, being the reporting currency of the company," it said.
For the six month period, Sports Toto's net profit fell 38.1 per cent to RM84.38 million from RM136.35 million, while revenue rose 4.8 per cent to RM2.96 billion from RM2.83 billion previously.
The company achieved revenue growth mainly contributed by H.R. Owen.
On its prospect, Sports Toto said the management is cautiously optimistic that the number forecast operators (NFOs) business in Malaysia will continue its upward trajectory of per draw sales growth driven by favourable consumer spending during the festive period and continued consumer interest in the jackpot games.
The company said illegal NFO operators are bound to encroach the underserved areas of Kedah and Perlis, where its outlets have been closed.
"The management will strive to develop sustainable business models within legislative guidelines to meet the company's economic, environmental and sustainable goals in serving the communities and nation.
"It anticipates that the company's businesses will remain encouraging and steadfast amid the resilient nature of the NFO business well noted in the past economic crises and turbulent periods," it added.
Sports Toto is confident that it will continue to lead in terms of market share in the NFO business for the financial year ending June 30, 2024. Ends