GGRAsia – AGTech losses widen sharply in first half

AGTech losses widen sharply in first half

Aug 13, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck

AGTech Holdings Ltd, a supplier to mainland China’s regulated lottery network, saw its first half losses widen by nearly 70 percent to HKD88.9 million (US$11.5 million) from HKD52.7 million in the year prior period, on declining revenue.

The firm provides equipment including lottery terminals to China’s Sports Lottery Administration Centre.

AGTech said in a filing to the Hong Kong Stock Exchange that the reason for the losses in the 6 months ended June 30, 2014, was primarily due to depreciation expenses due to the establishment of a data centre for a lottery game, “the relocation of the group’s Beijing office in China,” and the rise in share-based payments totalling approximately HKD64.1 million as a result of the increase in share options of the company granted to directors and other eligible persons.

Total group revenue for the first half amounted to approximately HKD69.4 million – a fall of nearly 29 percent on the year earlier number of HKD97.2 million.

Most of the revenue for the period was derived from “gaming technologies…and provision of sports lottery management and marketing consultancy services in the PRC,” said AGTech.

It added that the dip in revenue was mainly due to lower like-for-like sales in the hardware division as well as the scheduled expiry of certain contracts “as a result of the group’s transition of its core business from the legacy, lower-growth lottery management business to fully integrated services involving its advanced, high-growth gaming technologies business.”

Sports lottery sales in mainland China rose by 24.1 percent in the first half of 2014 in comparison with a year before, reaching RMB79.91 billion (US$12.9 billion), show data released in July by the Ministry of Finance.