GGRAsia – AGTech first half loss narrows to US$7 mln

AGTech first half loss narrows to US$7 mln

Aug 13, 2015 Newsdesk Industry Talk, Latest News, Rest of Asia

AGTech Holdings Ltd, a Hong Kong-listed supplier of equipment to mainland China’s regulated lottery market, narrowed its loss in the first half of 2015. The company reported a net loss of HKD54.6 million (US$7 million) for the six months to June 30, compared to a net loss of HKD88.9 million in the prior-year period.

The loss in the latest reporting period was attributed to share-based payments totalling approximately HKD31.2 million – after the granting of share options to directors and eligible employees – as well as to other major expenses including staff, office and research and development costs, the firm said in a filing on Tuesday.

Total revenue for the six-month period grew by 45.7 percent year-on-year to approximately HKD101.1 million.

“Most of the revenue was derived from gaming technologies (game software, systems, hardware and terminals) business and provision of sports lottery management and marketing consultancy services in the People’s Republic of China,” AGTech said.

“The increase in revenue was attributable to the sales of newly added hardware and technical services,” it added.

The firm’s hardware division supplies 29 provinces, cities and municipalities in mainland China with lottery hardware, according to Tuesday’s filing. AGTech also said it has machines operating live or on trial in markets including South Africa, Cyprus, the United Kingdom, Italy, Austria and Canada.

Mainland China’s lottery sales grew to RMB187.68 billion (US$30.7 billion) in the first half of 2015, up 5.2 percent year-on-year, data from the country’s Ministry of Finance show.

Chinese authorities have suspended online lottery sales in the country since April, a move that has hit several companies, including New York-listed 500.com Ltd.

In its latest filing, AGTech said it does not provide online lottery sales or maintain any website to conduct such sales in mainland China. The firm said however that it continues to monitor closely policy developments regarding lottery sales via Internet and mobile devices.

“We are pleased with the strategic progress of the group so far and expect to see significant regulatory progress during the second half of the year with relevant laws and regulations (particularly on internet and mobile distribution) introduced in China’s lottery industry,” John Sun, chairman and chief executive of AGTech, said in a separate statement.

“We see the further regulation and professionalisation of lottery supervision as a very positive trend for the group in 2015 and beyond,” he added.