A $2-billion improvement in nine-month revenue, spurred by big foreign-exchange gains, brisker remittance flows and a bigger take from lottery games, was not enough to foil a marginal decline in the profit gaming and lottery company Supreme Ventures Limited (SVL) made on operations since November 1 last year.

For the nine months to July 31, SVL recorded a net profit of $458.5 million, down 5.4 per cent from the $484.6 million gain it reported for the previous corresponding period.

The decline is despite revenue for the period moving to $18 billion from just more than the roughly $16 billion SVL saw in profit for the first nine months of its previous financial year.

Significant contribution

In a filing with the Jamaica Stock Exchange (JSE) this week, the company pointed to its financial services business as having made a significant contribution to the revenue increase.

"This is due to the increase in the number and value of the remittance transactions and the gain arising from the sale of foreign exchange through the cambio operation," the SVL statement said.

While income from financial services grew 37.8 per cent, the sale of top-up phone credit from pin code machines across its vast islandwide network of agents and SVL stores jumped a significant 57.8 per cent.

Lottery gaming revenue also improved more than 12 per cent over the corresponding period last year, with the firm also seeing a 7.8 per cent increase in income from video gaming and slot machines.

Unsuccessful hopes

But in presenting the financials, SVL Chairman Paul Hoo and Chief Executive Brian George all but admitted that efforts to rein in costs have not been as successful as hoped.

Direct expenses increased by $2.1 billion, or 15 per cent; operating expenses moved up $98.4 million, or seven per cent; while net foreign-exchange losses increased by $3.2 million.

Direct expenses moved to $15.9 billion from $13.8 billion while operating costs increased by seven per cent. For the reporting period, SVL noted that its performance was significantly affected by adverse expenses stemming from redundancy and separation costs amounting to $10 million.

Bad debt provision for gaming loss amounted to $23 million for the period, additional depreciation on wireless equipment increased to $59 million and the company wrote off $38 million worth of equipment.

"This performance underscores management's continued focus on increasing efficiency in operations, seeking opportunities for revenue generation and the need to monitor expenses for returns to all stakeholders," the SVL statement said in recognition of the less-than-comforting results.

SVL has in recent months been making moves to boost revenue. Its latest initiative was the launch of its newest product, the multi-jurisdictional Super Lotto, now played in seven territories across the Caribbean with a starting jackpot of US$2 million. The company expects to rake in an additional US$35million-US$40 million each year from the game.

Earnings per share for the reporting period moved to $0.174, compared to $0.184 for the same period last year.

SVL last traded on the JSE at a price of $2, with the market value of its share capital at $5.4 billion.

sabrina.gordon@gleanerjm.com