Quarterly Report • Sep 12, 2018
Quarterly Report
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| A. Representation of the Members of the Board of Directors 4 |
|---|
| B. Six-month Board of Directors' Report for the period ended on 30.06.2018 5 |
| 1. Financial progress and performances of reporting period 5 |
| 2. Significant events during the first semester of 2018 and their effect on the condensed interim financial statements 6 |
| 3. Main risks and uncertainties in the second semester of 2018 8 |
| 4. Company's strategy and Group's prospects for the second semester of 2018 12 |
| 5. Related Parties significant transactions 15 |
| 6. Alternative Performance Indicators (API) 16 |
| C. Condensed Interim Financial Statements18 |
| Independent Auditors' Report on Review of Condensed Interim Financial Information19 |
| 1. Statement of Financial Position23 |
| 2. Income Statement 24 |
| 2.1. Consolidated Income Statement 24 |
| 2.2. Income Statement of the Company 25 |
| 3. Statement of Profit or Loss and Other Comprehensive Income26 |
| 3.1. Consolidated Statement of Profit or Loss and Other Comprehensive Income 26 |
| 3.2. Statement of Profit or Loss and Other Comprehensive Income of the Company 27 |
| 4. Statement of Changes in Equity28 |
| 4.1. Consolidated Statement of Changes in Equity 28 |
| 4.2. Statement of Changes in Equity of the Company 29 |
| 5. Cash Flow Statement 30 |
| D. Notes on the condensed interim financial statements 31 |
| 1. General information for the Group and the Company 31 |
| 2. Basis for the preparation of the condensed interim financial statements31 |
| 2.1. Important accounting decisions, estimations and assumptions 32 |
| 2.2. New Standards, amendments to standards and interpretations 32 |
| 2.3. Changes in accounting policies 37 |
| 2.4. Restatement of results due to amendment of VLTs license terms 40 |
| 3. Group structure 41 |
| 4. Operating segments42 |
| 5.1. Intangible assets 43 |
|---|
| 5.2. Property, plant and equipment 45 |
| 5.3. Investments in subsidiaries 47 |
| 5.4. Cash and cash equivalents 47 |
| 5.5. Trade receivables 48 |
| 5.6. Other current assets 48 |
| 5.7. Loans 49 |
| 5.8. Employee benefit plans 50 |
| 5.9. Provisions 51 |
| 5.10. Trade payables 51 |
| 5.11. Tax liabilities 52 |
| 5.12. GGR Contribution and other levies and duties 52 |
| 5.13. Agents' commissions 53 |
| 5.14 Other NGR related commissions 53 |
| 5.15. Other operating income 53 |
| 5.16. Other operating cost 54 |
| 5.17. Payroll expenses 54 |
| 5.18. Marketing expenses 54 |
| 5.19. Other operating expenses 55 |
| 5.20. Financial results income / (expenses) 55 |
| 5.21. Income tax expense 56 |
| 5.22. Related party disclosures 56 |
| 5.23. Other disclosures 58 |
| 5.24. Financial instruments and financial risk factors 59 |
| 5.25 Reclassifications 65 |
| 5.26. Subsequent events 66 |
| E. Summary Financial Information for the period ended on 30.06.201867 |
| F. Report on Use of Funds Raised from the issuance of Non-Convertible Bond Loan through payment in cash for the period from 01.01.2018 to 30.06.201868 |
| Report on the findings arising from the performance of Agreed Upon Procedures in connection with the Report on Use of Funds Raised71 |
(according to article 5, par. 2 of L. 3556/2007)
The members of the OPAP S.A. Board of Directors, of parent company (the "Company"):
notify and certify that as far as we know:
Athens, 11 September 2018
Chairman Chief Executive Officer Board Member and Chief Financial Officer
Kamil Ziegler Damian Cope Michal Houst
(according to par. 6 of article 5 of the Law 3556/2007 and the decisions of Hellenic Capital Market Commission Decision 8/754/14.04.2014 article 4 and Decision 1/434/2007 article 3)
The six-month Board of Directors Report of OPAP S.A. (the "Company" or "Parent company") at hand concerns the first semester of 2018 and was written in compliance with provisions set forth in article 5 of the Law 3556/2007 and the relevant Hellenic Capital Market Commission Rules issued by the Board of Directors of the Hellenic Capital Market Commission.
The report describes briefly the financial outcome of the Group and the Company respectively for the first semester of 2018, as well as significant events which took place during the same period and had a significant effect on the Condensed Interim Financial Statements. It also describes significant risks that may arise during the following remaining period of the fiscal year 2018 and finally, the material transactions with the Company's and the Group's related parties.
Basic Group financials are presented below:
| (Amounts in thousands of euro) | 01.01- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
Δ % |
|---|---|---|---|
| Revenue (GGR) | 737,457 | 688,460 | 7.1% |
| GGR contribution and other levies and duties | (241,997) | (229,241) | 5.6% |
| Net gaming revenue (NGR) | 495,459 | 459,219 | 7.9% |
| Profit before interest, tax, depreciation and amortization (EBITDA) |
157,423 | 130,651 | 20.5% |
| Profit before tax | 98,778 | 76,292 | 29.5% |
| Profit for the period | 66,379 | 50,688 | 31.0% |
| Net increase/(decrease) in cash and cash equivalents | |||
| Cash inflows from operating activities | 104,118 | 119,413 | (12.8%) |
| Cash outflows used in investing activities | (18,866) | (34,993) | (46.1%) |
| Cash outflows from financing activities | (151,529) | (27,804) | 445.0% |
Basic Company financials are presented below:
| (Amounts in thousands of euro) | 01.01- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
Δ % |
|---|---|---|---|
| Revenue (GGR) | 614,638 | 563,401 | 9.1% |
| GGR contribution and other levies and duties | (210,787) | (196,565) | 7.2% |
| Net gaming revenue (NGR) | 403,851 | 366,837 | 10.1% |
| Profit before interest, tax, depreciation and amortization (EBITDA) |
141,343 | 116,529 | 21.3% |
| Profit before tax | 96,907 | 80,376 | 20.6% |
| Profit for the period | 66,535 | 58,540 | 13.7% |
| Net increase/(decrease) in cash and cash equivalents | |||
| Cash inflows from operating activities | 98,723 | 130,687 | (24.5%) |
| Cash inflows/(outflows) used in investing activities | 6,177 | (29,160) | (121.2%) |
| Cash outflows from financing activities | (151,723) | (16,790) | 803.6% |
The first Gaming Halls commenced their operating activities on 11.01.2017. Until 30.06.2018, in total, 13,775 VLT machines were operating in 307 Gaming Halls and 1,594 Opap Stores. The main target of the Company's Management is to continue the roll-out of VLT machines during the year.
In order to achieve more favourable borrowing terms, the Company proceeded in the period March-April 2018 with its loan portfolio restructuring. More specifically, it repaid, earlier and without extra cost, loans from various credit institutions of € 290,500 th. which at the time bore an interest rate of 3.9% (floating) and at the same time issued a new 5-year duration bond loan from Eurobank of € 250,000 th. which bears fixed interest of 3.1%.
The extraordinary General Meeting of Tora Direct S.A. that took place on 18.12.2017, approved a Share Capital Increase of € 1,001 th. through the issuance of 1,390,000 new ordinary shares with a nominal value of € 0.72 each. The share capital increase was covered on 11.01.2018.
On 30.01.2018 the extraordinary General Meeting of HORSE RACES S.A. decided to increase the company's share capital by € 5,000 th. through the issuance of 500,000 new ordinary shares of € 10 nominal price each. The share capital increase was covered on 05.02.2018.
7
On 12.02.2018 the procedure for the licensing of TORA WALLET S.A. as an Electronic Money Institution by the Bank of Greece was completed successfully. This development marks the official commencement of TORA WALLET S.A.'s activities in the financial services sector through OPAP's agency network.
During the Shareholders Extraordinary General Meeting which took place on 10.04.2018, a share capital increase was approved which amounted to € 18,972 th. through capitalizing part of share premium without issuing new shares and with simultaneous share nominal value increase. This amount was subsequently returned to the shareholders through an equal reduction in the nominal value of the shares.
OPAP S.A. according to the 18th Annual Ordinary Shareholders General Meeting, held on April 25th, 2018 decided upon the distribution of a total dividend for the fiscal year 2017 of 0.40 euro per share. It is noted that the Company's Board of Directors had decided the distribution of a gross amount of 0.10 euro per share as interim dividend. The remaining dividend of the amount of 0.30 euro per share which has been distributed, is subject to 15% withholding tax in accordance to articles 36 & 64 of L. 4172/2013, as this has been amended by L. 4387/2016, i.e. 0.045 euro per share.
During the Shareholders Extraordinary General Meeting which took place on 02.05.2018, a share capital decrease was approved which amounted to € 19,017 th. through shares cancellation. This amount was subsequently returned to the sole shareholder (OPAP S.A.).
Below we present the main risks and uncertainties to which Group is exposed.
From a macroeconomic perspective, the completion of the economic adjustment programs of the Greek economy in August set the grounds for the economy's stabilization that, in conjunction with the upgrade of Greece's creditworthiness, enhances the expectations for the economy's return to a sustainable development path. Nonetheless, the context of post-memorandum surveillance, the difficulties and the constraints towards the return to money markets as well as the turbulence in international markets raise concerns about the prospects of the Greek economy in the short-term and may negatively affect business activity, operating results and the overall financial position of the Group.
The Group's activity is significantly affected by the disposable income, private consumption, which in turn are affected by the current economic conditions in Greece, such as the unemployment rate, interest rates, inflation rate, tax rate and the increase in GDP rate. Moreover, the economic recession, financial uncertainty and a number of the Group's customers potential interpretation that the economic conditions are deteriorating, could result in a decrease of the usage of the various gaming services that the Group offers to the public.
Any negative development in the economy would affect the normal operations. However, Management is continually adjusting to the situation and ensures that all necessary actions are taken to maintain undisturbed activities.
The gaming sector in Greece is intensively regulated by the Hellenic Gaming Commission. The Greek authorities have the right to unilaterally alter the legislative and regulatory framework that governs the manner and modus operandi of the games that the Group offers.
The developments in the Greek regulatory framework, drive evolving regulatory challenges for the Group. Changes in the regulatory environment may have a substantial impact, through restricting betting activities or changing compliance costs and taxes.
OPAP consistently complies with regulatory standards, while understands and addresses changing regulatory requirements in an efficient and effective manner. Additionally, a potential failure on the Group's part to comply with the governing rules and the regulatory framework, as well as the enactment of new laws or/and further regulatory enforcement could have a negative impact on the Group's business
activities. Additionally, restrictions on advertising can reduce the ability to reach new customers, thus impacting the implementation of the strategic objectives to focus on sustainable value increase.
OPAP is actively engaging and maintaining dialogue with authorities, regulators and other key stake holders, to continually monitor the changing regulatory/legal landscape and through appropriate policies, processes and controls to achieve a rational and balanced gaming regulation.
The Group's business activities and the sector in which it does business are subject to various taxes and charges, such as the special contribution regarding games which is calculated based on the gross gaming revenue, the tax on players' winnings and the income tax of legal entities.
The Company is exposed to the risk of changes to the existing gaming taxation status or the gaming tax rates, creating unexpected increased costs for the business and impacting the implementation of Group's strategic objectives for sustainable revenues and additional investments. The Company is seeking to promptly respond to any potential tax changes, by maintaining the required tax planning resources and developing contingency plans so as to implement the required mitigating actions and to minimize the overall impact.
Market risk arises from the possibility that changes in market prices such as exchange rates and interest rates affect the results of the Group and the Company or the value of financial instruments held. The management of market risk consists in the effort of the Group and the Company to control their exposure to acceptable limits.
Currency risk is the risk that the fair values of the cash flows of a financial instrument fluctuate due to foreign currency changes. The Group operates in Greece and Cyprus and there are not any agreements with suppliers in currencies other than in euro. All revenues from games are in euro, transactions and costs are denominated or based in euro, subsequently, there is not any substantial foreign exchange risk. Additionally, the vast majority of the Group's cost base is, either proportional to its revenues (i.e. payout to winners, agents commission) or to transactions with domestic companies (i.e. IT, marketing).
The Group is exposed to interest rate risk principally in relation to outstanding debt. The existing debt facilities, as of 30.06.2018, stand at € 651,466 th. and € 601,390 th. for the Group and the Company respectively. The Group follows all market developments with regards to the Interest rate environment and acts accordingly. On 30.06.2018 the Group is exposed to Interest rate risk on € 106,107 th. of debt as the remaining €99,390 th. are hedged via an interest rate swap and € 445,969 th. are with fixed interest rate.
The primary objective of the Group and the Company relating to capital management, is to ensure and maintain strong credit ability and healthy capital ratios to support the business plans and maximize value for the benefit of shareholders. The Group has improved materially its capital structure and maintains a healthy net debt/EBITDA ratio of 1.4x as of 30.06.2018. In addition, it retains an efficient cash conversion cycle thus optimizing the operating cash required in order to secure its daily operations, while diversifying its cash reserves so as to achieve flexible working capital management within the domestic capital control environment.
The Group manages the capital structure and makes the necessary adjustments to conform to changes in business and economic environment in which they operate. The Group and the Company in order to optimize the capital structure, may adjust the dividend paid to shareholders, return capital to shareholders or issue new shares.
The Group's exposure to credit risk arises mainly from agents' bad debts as well as from the debts of agents for which arrangements have been made. The main credit risk management policy is the establishment of credit limits per agent. Additionally, the Group is taking all necessary steps to mitigate credit risk exposure towards financial institutions. The Group is also exposed towards credit risk in respect of entities with which it has deposited funds or with which it has other contractual relationships. The Group manages credit risk exposure to its agents through various practices. Each agent is required to provide the Group with a warranty deposit as a guarantee. These deposits are aggregated and are available in the event of a default in payment by any agent. In addition, a maximum amount that an agent may owe during each settlement period has been imposed. If the amounts owed by an agent exceed the relevant limit during any settlement period, the agent's terminal is automatically blocked from accepting wagers.
The Group manages liquidity risk by managing betting games' payout ratio and the proper design of each game. With the exception of fixed-odds sports betting games, all of the remaining games have a theoretical payout (relating to prizes normally attributed to winners) based on each game's mathematics. As the theoretical payout is calculated on a very large number of draws, small deviations may occur in some of the numerical games in shorter time frames. For example, Kino is a fixed odds game that statistically distributes approximately 69.5% of net receivables to the winners, with deviations mostly around 1%. The Group manages liquidity risk by limiting the size of player winnings. For example, Kino has a maximum prize of € 1,000 th.. Maximum winnings/column are also defined for Stihima, a fixed odds betting game in which winning depends on correctly guessing the results of sporting events, and other events that by their nature allow for wagering. For Stihima game a comprehensive risk management methodology is implemented at different stages of the sport-betting cycle, setting different limits and odds per sport, league and game while treating each event differently. At any given time, bets placed are tracked, received and accepted or not accepted. In addition, the trading team can also monitor any high bets placed and negotiate with the bettor so that the bet is within the approval limits. Finally, proper software is used to find, in real-time, suspicious betting patterns and cases for sure bets or arbitrage opportunities.
Reliability and transparency in relation to the operation of the games are ensured by several security measures designed to protect information technology systems from breaches in security such as illegal retrieval and illegal storage of data and accidental or intentional destruction of data. Security measures cover data processing systems, software applications, the integrity and availability of data and the operation of the on-line network. Additionally, all critical business applications that relate to game operation and availability are hosted in systems that guarantee high availability, including transferring to a Backup Computer System if deemed necessary. Moreover, a critical evaluation of all systems is conducted – whether they are directly related to game availability or not – so that they can be integrated into the Disaster Recovery Plan, if deemed necessary. All applications are integrated in a security backup creation system according to their significance.
In October 2017, the Attorney General delivered to the Auditor General and following his request, an opinion by which OPAP CYPRUS LTD supposedly does not pay to the Republic of Cyprus the amounts due under the Bilateral Treaty by making a new interpretation of the Bilateral Treaty, totally different from the interpretation given by the Republic of Cyprus throughout the duration of the Bilateral Treaty since 2003. The General Accountant of the Republic of Cyprus, who is authorized under the Bilateral Treaty to audit the accounts of OPAP CYPRUS LTD, took a different position from the Attorney General supporting the way OPAP CYPRUS LTD calculated its contributions to the Republic of Cyprus. No claim has been made todate against OPAP CYPRUS LTD and OPAP S.A. is convinced that the interpretation of the Attorney General is unfounded.
OPAP CYPRUS LTD operates in Cyprus on the basis of the 2003 bilateral treaty ("BT") between the Republic of Cyprus and the Hellenic Republic. The BT may be terminated by either State, by serving to the other State 12 month prior notice.
The Law 51(Ι) 2018 entitled "2018 Law on Certain Games of Chance" was voted by the Cypriot Parliament on 18 May 2018 and published in the Government Gazette. According to such law, a special committee will run the concession process and submit a proposal to the Minister of Finance for the selection of the appropriate operator to be granted with the exclusive license regarding the offer of certain numeric games of chance in the Republic of Cyprus. This Committee shall first proceed to a suitability assessment of the current operator, i.e. OPAP CYPRUS LTD. If the existing operator is not found suitable for being granted an exclusive license, the Committee shall ask expression of interest from up to five (5) interested parties. The prospective operator will sign a concession agreement with Republic of Cyprus and will be granted with an exclusive, non-transferable license. The games licensed, to be specified in the concession agreement, shall fall into the following categories: (a) "numeric lotteries", which refer to the exact prediction of random numbers being the result of a draw; and (b) non-fixed odds games, based on the exact result of combination of results of sports events.
Driven by our 2020 vision to establish OPAP as a world-class gaming entertainment company, we have continued working on our eight strategic priorities that will help us generate, capture and sustain value for the community, for the market and for our operation. Exactly these strategic priorities act as the framework underpinning the delivery of our 2020 vision.
The first strategic priority is all about the Customer. OPAP is a consumer-facing business serving millions of customers. The Customer is at the centre of everything that we do. So, we intensify our actions to understand our customer better, increase our internal focus and continuously respond to changing customer behavior.
Our Network consists the basis of our business activities. OPAP aims to develop its agencies to be the customer's local entertainment destination through significant investments in the agencies themselves, introducing a number of products and services. The Company also puts emphasis on the alignment of its interests with those of its agents and on the increase of the level of support that is provided to them.
Our people are at the heart of everything we do; they bring life into the Company. OPAP aims to build high-performing teams, attracting at the same time new talents to the Group, developing the existing people further through the expanded OPAP Academy program and creating stronger bonds between the Company and its people through a number of initiatives, including more regular two-way internal communications. communications.
Our aim is to offer a broad range of attractive, new and improved products and services for our customers and our network, while the digital field consists a great opportunity for our Company. We launched a new class/set of new products (i.e. Virtual Sports, SSBTs, VLTs) and our efforts were continued ahead of the 2018 World Cup that took place in Russia.
The transformation of the Digital & Technology role within the Group consists one of our objectives; we continue investing on guaranteeing modern and optimum solutions, which will provide an improved level of control and flexibility to the ongoing delivery and improvement of OPAP's products for the customers, setting at the same time the basis for future strategy.
This strategic priority consists a key priority in order to further strengthen customer loyalty to OPAP brand. OPAP understands that it has an important role within the communities in which it operates both in Greece and Cyprus, targeting to the creation of long-term, meaningful benefit so as the Company contributes to building a brighter future. OPAP operates displaying strong commitment for health, sports and employment.
In addition, OPAP focuses on stakeholders' engagement. Specifically, our people and customers participate in the CSR programs creating stronger bonds to them, a fact which contributes to building stronger communication with customers on both national and local level.
Last but not least, the Company adopts and develops the highest standards of integrity and responsibility which are part of an integrated Responsible Gaming strategy. The continuous improvement of the policies and procedures Group-wide, the substantial investment in training to help ongoing player protection and into educational campaigns promoting responsible gaming, as well as the international recognition by following clear KPI's consist the framework of this strategic pillar's approach.
The OPAP brand has a remarkable level of recognition both in Greece and Cyprus consisting one of our most important assets. By re-establishing our brand's identity and making the most of our powerful 'anthropaki' logo, the Company can further extend the reach and impact of its brand, as well as strengthens its dedication to maintain a strong and consistent emotional connection with its customers.
OPAP intends to an ongoing and effective cooperation with the Regulator and other significant public sectors in local and international level, maintaining an open dialogue and establishing a better mutual understanding for items of common interest.
Following the completion of the Economic Adjustment Programs, macro recovery is expected to accelerate, however private consumption will likely lag GDP growth. In this context, the Group is constantly rejuvenating its portfolio of products at the same time utilizing modern digital and technological capabilities as clearly demonstrated by the delivery of the Group's technology transformation, having introduced over 50,000 new devices (terminals, screens, SSBTs, e.t.c.)in the last 18 months. In addition, we have already installed more than 15,000 VLTs and will gradually add more POSs & machines by the end of the year. We have also installed c.4,000 self-service betting terminals (SSBTs) and are looking to add games other than betting within the course of the year. As for virtual games, 2018 has been the first full-year of operations and we plan to bring in new content by the end of 2018. We are also targeting the re-launch of the online offering as well as the upgrade of our existing land-based games (KINO, PAME STIHIMA, JOKER) in order to maintain players' interest within the new environment.
In the following tables significant transactions are presented among the Group and the Company and the related parties as defined by IAS 24:
| Company | Expenses Income Payables |
Receivables | ||
|---|---|---|---|---|
| (Amounts in thousands euro) | ||||
| OPAP SERVICES S.A. | 2,470 | 64 | 1,175 | 15,979 |
| OPAP SPORTS LTD | - | 836 | - | - |
| OPAP CYPRUS LTD | - | 11,742 | - | 8,417 |
| OPAP INVESTMENT LTD | - | - | 6,041 | 802 |
| HELLENIC LOTTERIES S.A. | - | 2,972 | - | 2,406 |
| HORSE RACES S.A. | 1 | 244 | - | 342 |
| TORA DIRECT S.A. | 151 | 124 | 78 | 3,541 |
| TORA WALLET S.A. | - | 5 | 36 | 3 |
| NEUROSOFT S.A. | 3,205 | - | 881 | - |
| Company | Expenses | Income | Assets' Purchase |
Payables | Receivables |
|---|---|---|---|---|---|
| (Amounts in thousands euro) | |||||
| Related companies | 1,472 | - | - | 269 | - |
| (Amounts in thousands euro) | GROUP | COMPANY | |
|---|---|---|---|
| Category | Description | 01.01.-30.06.2018 | 01.01.-30.06.2018 |
| Salaries | 5,148 | 4,040 | |
| MANAGEMENT PERSONNEL |
Other compensations | 174 | 107 |
| Cost of social insurance | 571 | 380 | |
| Total | 5,893 | 4,527 |
| (Amounts in thousands euro) | GROUP | COMPANY | ||
|---|---|---|---|---|
| Category | Description | 01.01.-30.06.2018 | ||
| BOARD OF DIRECTORS | Salaries | 451 | 186 | |
| Cost of social insurance | 54 | 33 | ||
| Total | 505 | 218 |
| (Amounts in thousands euro) | GROUP | COMPANY |
|---|---|---|
| Liabilities from Bod' compensation & remuneration | 30.06.2018 | 30.06.2018 |
| BoD and key management personnel | 1,109 | 906 |
| Total | 1,109 | 906 |
From the abovementioned transactions, the transactions and the balances from the subsidiaries have been eliminated from the consolidated Financial Statements of the Group.
The Group presents certain Alternative Performance Indicators besides from IFRSs arising from its financial statements, particularly the indicator "Net Debt/Earnings before interest, taxes, depreciation and amortization (EBITDA)". The indicators which are defined and calculated in detail below, are widely used in order to present the Group's profits in relation to its debt and how viable servicing its debt is. The Alternative Performance Indicators should not be considered as a substitute for other figures and have been calculated in accordance with the provisions of IFRS.
| (Amounts in thousands of euro) | 01.01- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
Δ % |
|---|---|---|---|
| Profit before interest, tax, depreciation and amortization (EBITDA) / Revenue (GGR) |
21.3% | 19.0% | 12.5% |
| Profit attributable to owners of the Company / Revenue (GGR) |
9.0% | 7.2% | 24.1% |
| Net debt | 471,641 | 217,045 | 117.3% |
| Total debt / Total equity | 90.8% | 58.9% | 54.2% |
| Net debt / Profit before interest, tax, depreciation and amortization (EBITDA) last twelve months |
1.4 | 0.8 | 80.5% |
Calculated as the ratio of Earnings before tax, depreciation and amortization (EBITDA) over GGR in the
period.
OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800
Calculated as the ratio of net profit for the year over GGR for the period.
Calculated as the sum of short-term borrowings plus long-term Loans at the end of the period minus the "Cash and cash equivalents" balance at the end of the period.
Calculated as the ratio of the sum of Short-term loan plus the sum of Long-term loans at the end of the period over Equity at the end of the period.
Net Debt /Earnings before interest, taxes, depreciation and amortization (EBITDA) last twelve months Calculated as the ratio of Net Debt (see above) over earnings before interest, tax and amortization in the last twelve months.
EBITDA for the last 12 months on 30.06.2018 is calculated as (EBITDA for the period 01.01.-30.06.2018 = € 157,423 th.) + (EBITDA for the fiscal year 2017 = € 306,455 th.) - (EBITDA for the period 01.01.-30.06.2017 = € 130,651 th.), i.e. the EBITDA over the last 12 months on 30.06.2018 is estimated at € 333,228 th.. EBITDA for the last 12 months on 30.06.2017 is calculated as (EBITDA for the period 01.01.-30.06.2017 = € 130,651 th.) + (EBITDA for the fiscal year 2016 = € 307,450 th.) - (EBITDA for the period 01.01.-30.06.2016 = € 161,451 th.), i.e. the EBITDA over the last 12 months on 30.06.2017 is estimated at € 276,739 th..
Athens, 11 September 2018
Chairman of the BoD
Kamil Ziegler
The attached Condensed Interim Financial Statements as at 30.06.2018 were approved by the Board of Directors of OPAP S.A. on 11.09.2018 and are posted at the Company's website www.opap.gr as well as in the website of Athens Stock Exchange. The attached Condensed Interim Financial Statements will remain at the disposal of investors for at least five years from the date of their announcement. It is noted that the published attached condensed financial information arises from the Condensed Interim Financial Statements, which aim to provide the reader with a general information about the financial status and results of the Company but they do not present a comprehensive view of the financial position and results of financial performance and cash flows of OPAP S.A. (the "Company") and the Group of OPAP
S.A. (the "Group"), in accordance with the International Financial Reporting Standards (IFRS).
Greek Organization of Football Prognostics S.A.
We have reviewed the accompanying condensed Standalone and Consolidated Statement of Financial Position of Greek Organization of Football Prognostics S.A. (the "Company") as of 30 June 2018 and the related condensed Standalone and Consolidated Statements of Income and Comprehensive Income, Changes in Equity and Cash Flows for the six-month period then ended and the selected explanatory notes, which comprise the interim condensed financial information and which forms an integral part of the six-month financial report of article 5 of Law 3556/2007. Management is responsible for the preparation and presentation of this interim condensed financial information in accordance with the International Financial Reporting Standards adopted by the European Union and specifically with IAS 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on this interim condensed financial information based on our review.
We conducted our review in accordance with the International Standard on Review Engagements (ISRE) 2410 "Review of interim financial information performed by the independent auditor of the entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, which have been incorporated in Greek legislation, and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial information as at 30 June 2018 is not prepared, in all material respects, in accordance with IAS 34.
We draw attention to the note 2.4 of the notes to the Interim Condensed Standalone and Consolidated Financial Statements, where it is mentioned that the comparative information in the Interim Condensed Standalone and Consolidated Financial Statements for the period ended
30 June 2017 has been restated. Our conclusion is not modified in respect of this matter.
Our review did not identify any inconsistency or disparity of the other information of the six-month financial report as provided for by article 5 of L. 3556/2007 with the accompanying interim condensed financial information.
Athens, 11 September 2018
KPMG Certified Auditors ΑΕ
AM SOEL 114
Nikolaos Vouniseas, Certified Auditor Accountant
AM SOEL 18701
(Amounts in thousands of euro)
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| Notes | 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| ASSETS | |||||
| Non - current assets | |||||
| Intangible assets | 5.1 | 1,135,805 | 1,163,867 | 982,907 | 1,001,442 |
| Property, plant & equipment | 5.2 | 114,265 | 109,298 | 88,976 | 86,994 |
| Investment property | 913 | 922 | 913 | 922 | |
| Goodwill | 54,676 | 54,676 | - | - | |
| Investments in subsidiaries | 5.3 | - | - | 262,927 | 281,945 |
| Long-term receivables | 2 | 2 | 2 | 2 | |
| Other non-current assets | 28,507 | 22,553 | 46,233 | 40,225 | |
| Deferred tax asset | 519 | 5,209 | - | - | |
| Total non - current assets | 1,334,687 | 1,356,527 | 1,381,958 | 1,411,530 | |
| Current assets | |||||
| Cash and cash equivalents | 5.4 | 179,825 | 246,102 | 47,447 | 94,270 |
| Inventories | 7,876 | 7,920 | 1,659 | 1,927 | |
| Trade receivables | 5.5 | 104,925 | 127,829 | 35,357 | 54,360 |
| Other current assets | 5.6 | 38,833 | 58,532 | 18,455 | 29,896 |
| Total current assets | 331,458 | 440,383 | 102,917 | 180,454 | |
| TOTAL ASSETS | 1,666,145 | 1,796,910 | 1,484,875 | 1,591,984 | |
| EQUITY & LIABILITIES | |||||
| Equity | |||||
| Share capital | 95,700 | 95,700 | 95,700 | 95,700 | |
| Reserves | 33,034 | 33,034 | 31,900 | 31,900 | |
| Treasury shares | (9,039) | (9,039) | (9,039) | (9,039) | |
| Retained earnings | 563,765 | 595,075 | 567,793 | 598,462 | |
| Equity attributable to owners of the Company | 683,461 | 714,770 | 686,354 | 717,023 | |
| Non-controlling interests | 33,714 | 43,397 | - | - | |
| Total equity | 717,174 | 758,167 | 686,354 | 717,023 | |
| Non-current liabilities | |||||
| Loans | 5.7 | 650,883 | 513,098 | 601,214 | 467,342 |
| Deferred tax liability | - | - | 13,608 | 9,252 | |
| Employee benefit plans | 5.8 | 3,898 | 3,084 | 3,480 | 2,735 |
| Provisions | 5.9 | 30,935 | 31,187 | 29,521 | 29,773 |
| Other non-current liabilities | 10,202 | 9,354 | 7,962 | 7,590 | |
| Total non-current liabilities | 695,918 | 556,722 | 655,785 | 516,693 | |
| Current liabilities | |||||
| Loans | 5.7 | 583 | 169,171 | 176 | 169,171 |
| Trade payables | 5.10 | 130,645 | 173,860 | 44,479 | 77,005 |
| Tax liabilities | 5.11 | 74,055 | 89,771 | 64,890 | 78,409 |
| Other current liabilities | 47,770 | 49,218 | 33,191 | 33,683 | |
| Total current liabilities | 253,053 | 482,020 | 142,736 | 358,268 | |
| Total liabilities | 948,971 | 1,038,743 | 798,521 | 874,961 | |
| TOTAL EQUITY & LIABILITIES | 1,666,145 | 1,796,910 | 1,484,875 | 1,591,984 |
OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800
(Amounts in thousands of euro except earnings per share)
| 2018 | 2017 | ||||
|---|---|---|---|---|---|
| GROUP | Notes | 01.01- 30.06.2018 |
01.04- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
01.04- 30.06.2017 Restated (note 2.4) |
| Amounts wagered | 2,111,260 | 1,032,150 | 2,125,531 | 1,067,522 | |
| Income Statement is as follows: | |||||
| Revenue (GGR) | 737,457 | 360,197 | 688,460 | 329,563 | |
| GGR contribution and other levies and duties | 5.12 | (241,997) | (117,881) | (229,241) | (109,381) |
| Net gaming revenue (NGR) | 495,459 | 242,316 | 459,219 | 220,182 | |
| Agents' commissions | 5.13 | (180,990) | (88,446) | (174,093) | (83,320) |
| Other NGR related commissions | 5.13 | (26,402) | (13,729) | (15,658) | (8,422) |
| Other operating income | 5.15 | 59,758 | 32,090 | 51,152 | 26,246 |
| Other operating cost | 5.16 | (43,329) | (22,309) | (42,698) | (21,082) |
| 304,496 | 149,922 | 277,922 | 133,605 | ||
| Operating expenses | (147,073) | (79,717) | (147,272) | (81,443) | |
| Payroll expenses | 5.17 | (38,366) | (20,435) | (31,968) | (16,748) |
| Marketing expenses | 5.18 | (34,406) | (20,459) | (34,397) | (18,592) |
| Other operating expenses | 5.19 | (74,301) | (38,823) | (80,907) | (46,104) |
| Profit before interest, tax, depreciation and amortization (EBITDA) |
157,423 | 70,205 | 130,651 | 52,162 | |
| Depreciation and amortization | (46,242) | (23,387) | (44,538) | (21,793) | |
| Results from operating activities | 111,182 | 46,818 | 86,112 | 30,369 | |
| Finance income | 5.20 | 1,125 | 527 | 1,496 | 958 |
| Finance costs | 5.20 | (13,529) | (6,459) | (11,617) | (6,699) |
| Other finance income / (cost) | - | - | 300 | 150 | |
| Profit before tax | 98,778 | 40,886 | 76,292 | 24,778 | |
| Income tax expense | 5.21 | (32,399) | (14,438) | (25,604) | (7,887) |
| Profit for the period | 66,379 | 26,448 | 50,688 | 16,891 | |
| Profit attributable to: | |||||
| Owners of the Company | 66,101 | 26,231 | 49,742 | 16,521 | |
| Non-controlling interests | 278 | 217 | 945 | 370 | |
| Profit after tax | 66,379 | 26,448 | 50,688 | 16,891 | |
| Basic and diluted earnings (after tax) per share in € |
0.2080 | 0.0825 | 0.1565 | 0.0520 |
The attached notes on pages 31 to 66 form an integral part of the Condensed Interim Financial Statements.
OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800
(Amounts in thousands of euro except earnings per share)
| COMPANY | 2018 | 2017 | |||
|---|---|---|---|---|---|
| 01.01- 30.06.2018 |
01.04- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
01.04- 30.06.2017 Restated (note 2.4) |
||
| Amounts wagered | 1,752,515 | 855,103 | 1,763,557 | 891,161 | |
| Income Statement is as follows: | |||||
| Revenue (GGR) | 614,638 | 299,581 | 563,401 | 268,891 | |
| GGR contribution and other levies and duties | 5.12 | (210,787) | (102,429) | (196,565) | (93,682) |
| Net gaming revenue (NGR) | 403,851 | 197,152 | 366,837 | 175,209 | |
| Agents' commission | 5.13 | (148,895) | (72,684) | (141,997) | (67,848) |
| Other NGR related commission | 5.14 | (18,348) | (9,778) | (7,588) | (4,460) |
| Other operating income | 5.15 | 18,484 | 9,174 | 17,551 | 8,624 |
| 255,092 | 123,864 | 234,803 | 111,525 | ||
| Operating expenses | (113,749) | (61,860) | (118,274) | (66,059) | |
| Payroll expenses | 5.17 | (31,573) | (16,940) | (28,077) | (14,712) |
| Marketing expenses | 5.18 | (24,340) | (15,072) | (23,858) | (12,789) |
| Other operating expenses | 5.19 | (57,836) | (29,848) | (66,338) | (38,558) |
| Profit before interest, tax, depreciation and amortization (EBITDA) |
141,343 | 62,004 | 116,529 | 45,466 | |
| Depreciation and amortization | (33,693) | (17,032) | (33,590) | (16,320) | |
| Results from operating activities | 107,650 | 44,972 | 82,939 | 29,146 | |
| Finance income | 5.20 | 502 | 255 | 688 | 506 |
| Finance costs | 5.20 | (12,081) | (5,738) | (9,843) | (5,843) |
| Other finance income / (cost) | 836 | - | 6,592 | 6,592 | |
| Profit before tax | 96,907 | 39,489 | 80,376 | 30,401 | |
| Income tax expense | 5.21 | (30,372) | (13,611) | (21,836) | (6,874) |
| Profit for the period | 66,535 | 25,878 | 58,540 | 23,527 | |
| Profit attributable to: | |||||
| Owners of the Company | 66,535 | 25,878 | 58,540 | 23,527 | |
| Profit after tax | 66,535 | 25,878 | 58,540 | 23,527 | |
| Basic and diluted earnings (after tax) per share in € |
0.2094 | 0.0814 | 0.1842 | 0.0740 |
(Amounts in thousands of euro)
| 2018 | 2017 | ||||
|---|---|---|---|---|---|
| GROUP | Notes | 01.01- 30.06.2018 |
01.04- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
01.04- 30.06.2017 Restated (note 2.4) |
| Profit for the period | 66,379 | 26,448 | 50,688 | 16,891 | |
| Other comprehensive income - items that are or may be reclassified subsequently to profit or loss | |||||
| Loss from valuation of hedging derivatives | (473) | (657) | - | - | |
| Attributable income tax | 5.21 | 137 | 190 | - | - |
| Total items that may be reclassified to profit or loss |
(336) | (466) | - | - | |
| Other comprehensive income net of tax | (336) | (466) | - | - | |
| Total comprehensive income net of tax | 66,043 | 25,982 | 50,688 | 16,891 | |
| Total comprehensive income attributable to: |
|||||
| Owners of the Company | 65,765 | 25,765 | 49,742 | 16,521 | |
| Non-controlling interests | 278 | 217 | 945 | 370 | |
| Total comprehensive income net of tax | 66,043 | 25,982 | 50,688 | 16,891 |
(Amounts in thousands of euro)
| 2018 | 2017 | |||||||
|---|---|---|---|---|---|---|---|---|
| COMPANY | 01.01- 30.06.2018 |
01.04- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
01.04- 30.06.2017 Restated (note 2.4) |
||||
| Profit for the period | 66,535 | 25,878 | 58,540 | 23,527 | ||||
| Other comprehensive income - items that are or may be reclassified subsequently to profit or loss | ||||||||
| Loss from valuation of hedging derivatives | (473) | (657) | - | - | ||||
| Attributable income tax | 5.21 | 137 | 190 | - | - | |||
| Total items that may be reclassified to profit or loss |
(336) | (466) | - | - | ||||
| Other comprehensive income net of tax | (336) | (466) | - | - | ||||
| Total comprehensive income net of tax | 66,199 | 25,412 | 58,540 | 23,527 | ||||
| Total comprehensive income attributable to: |
||||||||
| Owners of the Company | 66,199 | 25,412 | 58,540 | 23,527 | ||||
| Total comprehensive income net of tax | 66,199 | 25,412 | 58,540 | 23,527 |
(Amounts in thousands of euro)
| GROUP | Share capital |
Reserves | Treasury shares |
Retained earnings Restated (note 2.4) |
Non controlling interests |
Total equity |
|---|---|---|---|---|---|---|
| Balance as at 1 January 2017 | 95,700 | 32,417 | (7,454) | 914,614 | 36,954 | 1,072,231 |
| Total comprehensive income for the period 01.01-30.06.2017 |
- | - | - | 49,742 | 945 | 50,688 |
| Transactions with owners of the Company | ||||||
| Αcquisition of treasury shares | - | - | (1,585) | - | - | (1,585) |
| Share capital increase expenses of subsidiaries | - | - | - | (165) | - | (165) |
| Dividends paid | - | - | - | (190,690) | (1,698) | (192,389) |
| Total transactions with owners of the Company | - | - | (1,585) | (190,856) | (1,698) | (194,139) |
| Balance as at 30 June 2017 | 95,700 | 32,417 | (9,039) | 773,500 | 36,201 | 928,779 |
| Share capital |
Reserves | Treasury shares |
Retained earnings Restated |
Non controlling interests |
Total equity |
|
| Balance as at 1 January 2018 | 95,700 | 33,034 | (9,039) | 595,075 | 43,397 | 758,168 |
| Total comprehensive income for the period 01.01-30.06.2018 |
- | - | - | 65,765 | 278 | 66,043 |
| Transactions with owners of the Company | ||||||
| Share capital return | - | - | - | - | (6,261) | (6,261) |
| Share capital increase expenses of subsidiaries | - | - | - | (206) | (69) | (275) |
| Other movements | ||||||
| - | - | - | (1,523) | - | (1,523) | |
| Dividends paid | - | - | - | (95,345) | (3,632) | (98,977) |
| Total transactions with the owners of the Company |
- | - | - | (97,074) | (9,961) | (107,035) |
| COMPANY | Share capital |
Reserves | Treasury shares |
Retained earnings Restated (note 2.4) |
Total equity |
|---|---|---|---|---|---|
| Balance as at 1 January 2017 | 95,700 | 31,900 | (7,454) | 917,975 | 1,038,121 |
| Total comprehensive income for the period 01.01- 30.06.2017 |
- | - | - | 58,540 | 58,540 |
| Αcquisition of treasury shares | - | - | (1,585) | - | (1,585) |
| Dividends paid | - | - | - | (190,690) | (190,690) |
| Balance as at 30 June 2017 | 95,700 | 31,900 | (9,039) | 785,825 | 904,386 |
| Share capital |
Reserves | Treasury shares |
Retained earnings |
Total equity |
|
| Balance as at 1 January 2018 | 95,700 | 31,900 | (9,039) | 598,462 | 717,023 |
| Total comprehensive income for the period 01.01- 30.06.2018 |
- | - | - | 66,199 | 66,199 |
| Other movements | - | - | - | (1,523) | (1,523) |
| Dividends paid | - | - | - | (95,345) | (95,345) |
| Balance as at 30 June 2018 | 95,700 | 31,900 | (9,039) | 567,793 | 686,354 |
(Amounts in thousands of euro)
(Amounts in thousands of euro)
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| Notes | 01.01- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
01.01- 30.06.2018 |
01.01- 30.06.2017 Restated (note 2.4) |
|
| OPERATING ACTIVITIES | |||||
| Profit before tax | 98,778 | 76,292 | 96,907 | 80,376 | |
| Adjustments for: | |||||
| Depreciation & Amortization | 5.1,5.2 | 46,242 | 44,538 | 33,693 | 33,590 |
| Net finance costs | 12,386 | 10,099 | 10,741 | 2,542 | |
| Employee benefit plans | 809 | 1,466 | 740 | 1,386 | |
| Provisions for bad debts | 1,827 | 18 | 1,066 | - | |
| Other provisions | 444 | 12,093 | 444 | 12,122 | |
| Exchange differences | 18 | 21 | 2 | 21 | |
| Share of profit from associates | - | (300) | - | - | |
| Loss from investing activities | - | 21 | - | 4 | |
| Other non-cash items | - | - | 1,377 | 1,377 | |
| Total | 160,504 | 144,248 | 144,971 | 131,418 | |
| Changes in Working capital | |||||
| Decrease in inventories | 45 | 4,277 | 269 | 195 | |
| Decrease in receivables | 31,068 | 9,190 | 18,973 | 8,518 | |
| Decrease in payables (except banks) | (45,018) | (37,805) | (27,663) | (11,040) | |
| Increase / (decrease) in taxes payable | (27,694) | 9,037 | (23,815) | 9,308 | |
| Total | 118,904 | 128,947 | 112,734 | 138,399 | |
| Interest paid | (13,889) | (9,534) | (13,114) | (7,712) | |
| Income tax paid | (898) | - | (898) | - | |
| Net cash flows from operating activities | 104,118 | 119,413 | 98,723 | 130,687 | |
| INVESTING ACTIVITIES | |||||
| Proceeds from sale of tangible & intangible assets | 16 | 44 | 16 | - | |
| Loan from third parties repayments | 3,384 | 174 | 3,000 | - | |
| Share capital increase in subsidiaries | - | - | 19,018 | (15,000) | |
| Purchase of intangible assets | (9,339) | (22,901) | (9,065) | (1,914) | |
| Purchase of property, plant and equipment & investment | |||||
| property | (13,814) | (13,555) | (8,083) | (13,387) | |
| Dividends received | - | - | 836 | 500 | |
| Interest received | 887 | 1,244 | 454 | 641 | |
| Net cash flows from/(used) in investing activities | (18,866) | (34,993) | 6,177 | (29,160) | |
| FINANCING ACTIVITIES | |||||
| Proceeds from loans & borrowings | 5.7 | 260,477 | 200,000 | 250,005 | 200,000 |
| Payments of loans & borrowings | 5.7 | (290,611) | (30,953) | (290,500) | (20,953) |
| Αcquisition of treasury shares | - | (1,585) | - | (1,585) | |
| Transaction costs related to loans and borrowings | (1,250) | (3,726) | (1,250) | (3,726) | |
| Share capital increase expenses of subsidiaries | (275) | (165) | - | - | |
| Return of share capital of subsidiary to non controlling | |||||
| interests | (6,261) | - | - | - | |
| Dividends paid | (113,609) | (191,374) | (109,978) | (190,525) | |
| Net cash flows used in financing activities | (151,529) | (27,804) | (151,723) | (16,790) | |
| Net increase / (decrease) in cash and cash equivalents | (66,277) | 56,615 | (46,824) | 84,737 | |
| Cash and cash equivalents at the beginning of the period | 5.4 | 246,102 | 273,523 | 94,270 | 65,433 |
| Cash and cash equivalents at the end of the period | 179,825 | 330,139 | 47,447 | 150,170 |
OPAP S.A. was established as a private legal entity in 1958. It was reorganized as a société anonyme in 1999 domiciled in Greece and its accounting as such began in 2000. OPAP's registered offices and principal place of business, is 112 Athinon Avenue, 104 42 Athens, Greece. OPAP's shares are listed in the Athens Stock Exchange.
The Group, beyond the parent company, includes the companies which OPAP S.A., either directly or indirectly controls.
The Condensed Interim Financial Statements for the period that ended on 30.06.2018 (including the comparatives for the period that ended on 30.06.2017 and for the year that ended on 31.12.2017) were approved by the Board of Directors on 11.09.2018.
The condensed interim financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting".
The condensed interim financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the annual audited financial statements for the year ended 31.12.2017 which can be found in the Company's website www.opap.gr. The condensed interim financial statements have been prepared under the historical cost principle and the principle of the going concern.
The carrying amount of financial assets and liabilities is a reasonable approximation of their fair value.
The preparation of the condensed interim financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Management to exercise its judgment in the process of applying the Group's accounting policies.
The condensed interim financial statements have been prepared using the same accounting policies as were applied in the annual financial statements for the year ended 31.12.2017, considering the changes to Standards and Interpretations applicable from 01.01.2018.
The Group's and the Company's operations are not significantly affected by seasonality or cyclical factors. All amounts presented in the condensed interim financial statements are in thousands of euro unless otherwise stated.
The amounts included in the condensed interim financial statements have been rounded in thousands of euro and any differences are attributed to roundings.
The comparative figures have been reclassified where was necessary in order to comply with changes in presentation of the current period.
The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning during the current financial year and subsequent years.
As part of the annual improvements project, the International Accounting Standards Board issued nonurgent but necessary amendments to IFRS 1 and IAS 28.
The Group and the Company are evaluating the impact of the adoption of the above improvements at the financial statements.
IFRS 9 replaces the provisions of IAS 39 relating to classification and measurement of financial assets and financial liabilities and also includes an expected credit loss model which replaces the model on realized credit losses that is applied today. It also introduces an approach for hedge accounting based on principles and addresses inconsistencies and weaknesses in the current model of IAS 39.
Pursuant to the provisions of the new standard, financial instruments are classified and measured based on the context of the business model in which they are held and the characteristics of contractual cash flows. The effect to the Group from the application of this standard is described at note 2.3.
The purpose of the standard is to provide a single, comprehensible revenue recognition model to all contracts with customers in order to improve comparability between companies in the same industry, different sectors and different markets. It contains the principles to be applied by an entity to determine the amount of revenues and the timing of their recognition. The basic principle is that an entity would recognize revenue in a way that depicts the transfer of goods or services to customers at the amount that it expects to be entitled in exchange for these goods or services.
The effect to the Group from the application of this standard is described at note 2.3.
On 20.6.2016 the International Accounting Standards Board issued an amendment to IFRS 2 with which the following were clarified:
• in estimating the fair value of a cash-settled share-based payment, the accounting for the effects of vesting and non-vesting conditions shall follow the same approach as for equity-settled share-based payments,
•where tax law requires an entity to withhold a specified amount of tax (that constitutes a tax obligation of the employee) that relates to share-based payments and shall be remitted to the tax authority, such an arrangement shall be classified as equity-settled in its entirety, provided that the share-based payment would have been classified as equity-settled had it not included the net settlement feature,
• if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification.
The amendment above is not expected to have an impact at the financial statements. The amendment has not yet been adopted by the European Union.
On 12.9.2016 the International Accounting Standards Board issued an amendment to IFRS 4 with which:
• It provides insurers, whose activities are predominantly connected with insurance, with a temporary exemption from application of IFRS 9 and
•following full adoption of IFRS 9, it gives all entities with insurance contracts the option to present changes in fair value on qualifying designated financial assets in other comprehensive income instead of profit or loss.
The amendment above is not applicable to the financial statements of the Group and the Company. The amendment has not yet been adopted by the European Union.
The International Accounting Standards Board issued an amendment to IAS 40 with which it clarified that an entity shall reclass a property to, or from, investment property when, and only when, there is a change in use. A change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. A change in management's intentions for the use of a property does not provide evidence of a change in use. In addition, the examples of evidence of a change in use were expanded to include assets under construction and not only transfers of completed properties. The Group and the Company are evaluating the impact of adoption of IAS 40 at the financial statements. This standard has not yet been adopted by the European Union.
The Interpretation covers foreign currency transactions when an entity recognizes a non-monetary asset or liability arising from the payment or receipt of advance consideration before the entity recognizes the related asset, expense or income. The Interpretation clarified that the date of the transaction, for the purpose of determination of exchange rate to use on initial recognition of the asset, the income or expense, is the date of initial recognition of the non-monetary asset or liability (i.e. advance consideration). Additionally, if there are multiple payments or receipts in advance, the entity shall determine a date of the transaction for each payment or receipt of advance consideration.
The interpretation is not expected to have an effect at the financial statements of the Group and the Company. The interpretation has not yet been adopted by the European Union.
The interpretation explains how to recognize and measure deferred and current income tax assets and liabilities where there is uncertainty over a tax treatment. IFRIC 23 applies to all aspects of income tax accounting where there is such uncertainty, including taxable profit or loss, the tax bases of assets and liabilities, tax losses and credits and tax rates.
The interpretation is not expected to have an effect at the financial statements of the Group and the Company. The interpretation has not yet been adopted by the European Union.
The new standard significantly differentiates the accounting of leases for lessees while essentially maintaining the existing requirements of IAS 17 for the lessors. In particular, under the new requirements, the classification of leases as either operating or finance is eliminated. A lessee is required to recognize, for all leases with term of more than 12 months, the right-of-use asset as well as the corresponding obligation to pay the lease payments. The above treatment is not required when the asset is of low value.
The Group and the Company are evaluating the impact of adoption of IFRS 16 at the financial statements. This standard has not yet been adopted by the European Union.
These amendments allow companies to measure particular prepayable financial assets with so-called negative compensation at amortized cost or at fair value through other comprehensive income if a specified condition is met, instead of at fair value through profit or loss.
The Group and the Company are evaluating the impact of adoption of this amendment at the financial statements.
These amendments clarify that companies account for long-term interests in an associate or joint venture, to which the equity method is not applied, using IFRS 9. The Group and the Company are evaluating the impact of adoption of IFRS 9 at the financial statements.
The amendments are not expected to have an effect at the financial statements of the Group. The amendments have not yet been endorsed by the EU.
These amendments specify how companies determine pension expenses when changes to a defined benefit pension plan occur.
The Group and the Company are evaluating the impact of adoption of the amendments at the financial statements. The amendments have not yet been endorsed by the EU.
The improvements set out below describe the key changes to certain IFRSs.
The Group and the Company are evaluating the impact of adoption of these improvements at the financial statements. The improvements have not yet been endorsed by the EU.
The amendments clarify that a company remeasures its previously held interest in a joint operation when it obtains control of the business.
The amendments clarify that a company does not remeasure its previously held interest in a joint operation when it obtains joint control of the business.
The amendments clarify that a company accounts for all income tax consequences of dividend payments in the same way.
The amendments clarify that a company treats as part of general borrowings any borrowing originally made to develop an asset when the asset is ready for its intended use or sale.
On 18 May 2017, the IASB finished its long-standing project to develop an accounting standard on insurance contracts and published IFRS 17, 'Insurance Contracts'. IFRS 17 replaces IFRS 4, which currently permits a wide variety of practices. IFRS 17 will fundamentally change the accounting by all entities that issue insurance contracts and investment contracts with discretionary participation features.
This standard is not applicable at the financial statements of the Group and the Company.
Amendments settle in an inconsistency between the provisions of IFRS 10 and IAS 28 on the sale or contribution of assets between an investor and an associate or joint venture. The main effect of the changes is that it is recognized the entire gain or loss of a transaction that includes an activity (either in the form of a subsidiary or not). Partial profit or loss is recognized when the transaction includes assets that do not constitute an activity, even if these assets are in the form of a subsidiary.
The amendments above are not expected to have an effect at the financial statements of the Group and the Company. The amendments have not yet been adopted by the European Union.
Τhe accounting policies applied in current Interim Financial Statements are the same to those which applied in the Group's Consolidated Financial Statements for the year ended on 31.12.2017.
On 01.01.2018 the Group adopted and applied for the first time IFRS 15 "Revenue from Contracts with customers" and IFRS 9 "Financial Instruments" following the modified retrospective approach under which the cumulative impact of the adoption was recognized during the initial application i.g 01.01.2018 while the information of 2017 were not restated but presented according to the previous standards and interpretations.
Under IAS 34, the impact of the two aforementioned standards for the Group and the Company are presented below.
IFRS 15 replaces IAS 11 "Construction Contracts", IAS 18 "Revenue" and all related Interpretations which apply to revenues arising from contracts with customers, unless those contracts are under the scope of other standards.
Under IFRS 15 revenue is recognized and measured using the following five step model:
The main principle is that an entity would recognize revenue in a way that depicts the transfer of goods or services to customers at the amount that it expects to be entitled in exchange for these goods or services. It also contains the principles that an entity should apply in order to determine the measurement of revenues and the timing of their recognition. Thus, Under IFRS 15, revenue is recognized when the entity satisfies a performance obligation by transferring the control of a promised good or service to the customer at a point in time or over time.
The purpose of the standard is to provide a single, comprehensible revenue recognition model to all contracts with customers in order to improve comparability between companies in the same industry, different sectors and different markets.
On 1.1.2018, the Group and the Company adopted IFRS 15 by using the modified retrospective approach, meaning that the cumulative impact of the adoption was recognized in retained earnings without restatement of the comparative period. However, due to the fact that the Group's core revenue arisesfrom the gaming activity which is not related with contracts with customers, there was no impact on its profitability, liquidity or financial position during the first adoption and therefore, opening retained earnings were not adjusted.
Finally, as far as the future reporting periods are concerned, the impact that the Group expects from the IFRS 15 application is immaterial, it results from the subsidiaries which do not activate in gaming sector and also, it will concern contracts with customers which will have not been completed as at the reporting date.
IFRS 9 replaces the guidance of IAS 39 which deals with the classification and the measurement of financial assets and financial liabilities and it also, includes an expected credit losses model which replaces the incurred loss impairment model. Moreover, IFRS 9 establishes a new more principlesbased approach to hedge accounting and addresses inconsistencies and weaknesses in the model in IAS 39.
The adoption of IFRS 9 had no effect on the Group's accounting policies relating to financial liabilities. However, as far as the classification and measurement of financial assets is concerned, it should be mentioned the following:
Except for the trade receivables that are initially measured at the transaction price, the Group measures a financial asset at fair value plus transaction costs with the exception of those financial assets which are measured at fair value through profit or loss.
Subsequently, Under IFRS 9 the financial instruments are measured at fair value through profit or loss (FVTPL), amortized cost, or fair value through other comprehensive income (FVOCI). The classification is based on two criteria:
Under the IFRS 9 guidance, the new classification and measurement of the financial assets are as follows:
Financial assets at amortized cost.
The category includes the financial assets that are held within the business model with the objective to hold them and collect cash inflows that meet the SPPI criterion.
All the financial assets of the Group and the Company are measured at amortized cost.
OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800
The category includes financial assets which do not meet the criteria for measurement at amortized cost.
The Group and the Company do not hold financial assets it this category.
It should be noted that as at 01.01.2018, there was no impact resulted from the aforementioned new classification.
The group holds two types of financial assets that are subject to IFRS 9 new expected credit loss model:
While cash and cash equivalents are also subject to the impairment under IFRS 9, the identified impairment loss was not significant due to the fact that the cash and cash equivalents of the Group are held in reliable financial institutions within the European Union.
Under IFRS 9 the Group should adopt the expected credit losses (ECL) model for both types of financial assets, trade receivables and other financial assets at amortized cost. It is mentioned that the ECL model is based on the difference between the cash inflows which are receivable and the actual cash inflows that the Group expects to receive. All cash inflows in delay are discounted.
The Group applies the IFRS 9 simplified approach in order to measure the expected credit losses using a lifetime expected loss allowance for all trade receivables.
To measure the expected credit loss in relation to trade receivables, the Group has established a provision matrix relying on aging analysis, which is based on the Group's historical credit loss experience, adjusted for forwardlooking factors specific to the debtors and the economic environment.
As at 01.01.2018, the Group and the Company had no impact from the adoption of the standard. However, the impact from the application of IFRS 9 during the first semester of 2018 relating the expected credit losses amounts to € 145 th. for the Group and to € 99 th. for the Company.
Relating to the other Group's financial assets at amortized cost, the general approach is applied. These assets are considered to have low credit risk and any loss allowance is therefore, limited to 12 months' expected losses. It is noted that there was no impact for the both, Group and Company, as at 01.01.2018 relating to the other financial assets at amortized cost.
Finally, as far as the hedge accounting is concerned, the general hedge accounting mechanism of IAS 39 has been retained however, a greater flexibility has been introduced over the instruments eligible for hedge accounting and effectiveness testing.
The changes related to the hedge accounting had no impact for the Group and the Company.
On November 2011, according to the Law 4002/2011, article 39, OPAP S.A. was awarded an exclusive license to install and operate 35,000 VLT machines within the Greek territory. The duration of the license was set at 10 years and the total consideration paid by OPAP S.A. amounted to € 560,000.
On November 2017, according to an amendment of the above law published in the Government Gazette issue number 176, the number of VLT machines was limited to 25,000 while the duration of the license was extended from 10 to 18 years starting from the commencement of the commercial operation of the first VLT machine which took place on 11.01.2017. Under the terms of the applicable law, OPAP S.A. shall be obliged to put all VLT machines into commercial operation until 31 December 2019.
The aforementioned amendment of the VLTs license terms resulted, during December 2017, to the recalculation of the amortization expense of the VLTs license retrospectively, for the period from 11.01.2017 (starting dated) to 31.12.2017. It should be mentioned that the Financial Statements of the Group and the Company for the year 2017 which were published on 27.03.2018 included the recalculated VLTs amortization and therefore no restatement is necessary. However, the Financial Statements of the Group and the Company for the periods which ended on 30.06.2017 and 30.09.2017 were published prior to the relevant law amendment and therefore, the Income Statement, the Statement of Changes in Equity and the Cash flow Statement should be restated so that the current and prior year period become comparable in order to present accurate information to the users of the Financial Statements.
| GROUP | 01.01-30.06.2017 Before restatement |
01.04-30.06.2017 Before restatement |
01.01- 30.06.2017 Restated |
01.04-30.06.2017 Restated |
|---|---|---|---|---|
| Depreciation and amortization | (28,822) | (14,252) | (44,538) | (21,793) |
| Results from operating activities | 101,828 | 37,910 | 86,112 | 30,369 |
| Profit before tax | 92,008 | 32,320 | 76,292 | 24,778 |
| Income tax expense | (30,162) | (10,075) | (25,604) | (7,887) |
| Profit for the period | 61,846 | 22,245 | 50,688 | 16,891 |
| Profit attributable to: | ||||
| Owners of the Company | 60,901 | 21,875 | 49,742 | 16,521 |
| Non-controlling interests | 945 | 370 | 945 | 370 |
| Profit after tax | 61,846 | 22,245 | 50,688 | 16,891 |
| Basic and diluted earnings (after tax) per share in € |
0.1916 | 0.0688 | 0.1565 | 0.0520 |
The tables below present the figures affected by the relevant law amendment:
OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800
| COMPANY | 01.01-30.06.2017 Before restatement |
01.04-30.06.2017 Before restatement |
01.01- 30.06.2017 Restated |
01.04-30.06.2017 Restated |
|---|---|---|---|---|
| Depreciation and amortization | (17,874) | (8,778) | (33,590) | (16,320) |
| Results from operating activities | 98,655 | 36,687 | 82,939 | 29,146 |
| Profit before tax | 96,092 | 37,943 | 80,376 | 30,401 |
| Income tax expense | (26,394) | (9,061) | (21,836) | (6,874) |
| Profit after tax | 69,699 | 28,881 | 58,540 | 23,527 |
| Basic and diluted earnings (after tax) per share in € |
0.2193 | 0.0909 | 0.1842 | 0.0740 |
There are no changes in the structure of OPAP Group as at 30.06.2018 compared to 31.12.2017.
| Company's Name | % of investment |
Country Of Incorporation |
Consolidation Method |
Principal Activities |
|---|---|---|---|---|
| OPAP S.A. | Parent company |
Greece | Numerical lottery games and sports betting |
|
| HELLENIC LOTTERIES S.A. | 67% | Greece | Full consolidation | Lotteries |
| OPAP CYPRUS LTD | 100% | Cyprus | Full consolidation | Numerical lottery games |
| OPAP SPORTS LTD | 100% | Cyprus | Full consolidation | Sports betting company |
| OPAP INTERNATIONAL LTD | 100% | Cyprus | Full consolidation | Holding company |
| OPAP SERVICES S.A. | 100% | Greece | Full consolidation | Sports events – Promotion – Services |
| OPAP INVESTMENT LTD | 100% | Cyprus | Full consolidation | Holding company |
| TORA DIRECT S.A. | 100% | Greece | Full consolidation | Services for electronic transactions - Mobile Top-ups - Utility and Bill Payments |
| HORSE RACES S.A. | 100% | Greece | Full consolidation | Mutual Betting on Horse Races |
| TORA WALLET S.A. | 100% | Greece | Full consolidation | eMoney Institution |
| NEUROSOFT S.A. | 67,72% | Greece | Full consolidation | Software |
For management information purposes and decision making, the Group is structured in operating segments as presented below:
| GROUP 01.01-30.06.2018 | Lotteries | Sports Betting |
Instant & Passives |
VLTs | Telecommunication & eMoney services |
Other | Total |
|---|---|---|---|---|---|---|---|
| Revenue (GGR) | 371,500 | 202,390 | 74,163 | 89,405 | - | - | 737,457 |
| GGR contribution and other levies and duties |
(123,309) | (69,619) | (22,249) | (26,821) | - | - | (241,997) |
| Net gaming revenue (NGR) | 248,191 | 132,771 | 51,914 | 62,583 | - | - | 495,459 |
| Agents' commission | (90,478) | (49,156) | (19,470) | (21,886) | - | - | (180,990) |
| Other NGR related commission | (269) | (6,499) | (6,893) | (12,741) | - | - | (26,402) |
| Other operating income | - | 306 | 40 | - | 43,105 | 16,307 | 59,758 |
| Other operating cost | - | - | - | - | (39,310) | (4,020) | (43,329) |
| 157,444 | 77,422 | 25,592 | 27,956 | 3,795 | 12,287 | 304,496 | |
| Operating expenses | (64,115) | (40,736) | (10,718) | (15,779) | (4,056) | (11,670) | (147,073) |
| Depreciation, amortization and impairment |
(10,531) | (7,523) | (8,718) | (16,872) | (133) | (2,464) | (46,242) |
| Results from operating activities | 82,798 | 29,164 | 6,156 | (4,695) | (394) | (1,847) | 111,182 |
| GROUP 01.01-30.06.2017 | Lotteries | Sports Betting |
Instant & Passives |
VLTs | Telecommunication & eMoney services |
Other | Total |
|---|---|---|---|---|---|---|---|
| Revenue (GGR) | 412,954 | 188,592 | 77,539 | 9,376 | - | - | 688,460 |
| GGR contribution and other levies and duties |
(137,906) | (65,102) | (23,420) | (2,813) | - | - | (229,241) |
| Net gaming revenue (NGR) | 275,048 | 123,489 | 54,119 | 6,563 | - | - | 459,219 |
| Agents' commission | (104,390) | (47,556) | (19,836) | (2,312) | - | - | (174,093) |
| Other NGR related commission | (617) | (6,329) | (7,205) | (1,507) | - | - | (15,658) |
| Other operating income | - | 309 | 4 | - | 39,612 | 11,227 | 51,152 |
| Other operating cost | - | - | - | - | (35,877) | (6,821) | (42,698) |
| 170,041 | 69,913 | 27,081 | 2,745 | 3,735 | 4,407 | 277,922 | |
| Operating expenses | (83,522) | (44,567) | (10,636) | (1,937) | (4,157) | (2,453) | (147,272) |
| Depreciation and amortization | (11,339) | (6,723) | (8,008) | (16,872) | (90) | (1,508) | (44,538) |
| Results from operating activities | 75,180 | 18,623 | 8,438 | (16,063) | (511) | 446 | 86,112 |
Intangible assets refer to software, concession rights and customer relationships and analyzed as follows:
| GROUP | Software | Rights of games |
Development cost |
Customer relationships |
Other | Total |
|---|---|---|---|---|---|---|
| Period that ended on 30 June 2017 | ||||||
| Opening net book amount (1 January 2017) |
11,296 | 1,203,494 | - | 2,068 | - | 1,216,858 |
| Additions | 1,773 | 877 | - | - | - | 2,651 |
| Reclassification of assets to tangible assets |
710 | - | - | - | - | 710 |
| Amortization charge | (3,864) | (33,172) | - | (129) | - | (37,165) |
| Net book amount (30 June 2017) |
9,915 | 1,171,199 | - | 1,939 | - | 1,183,053 |
| Year that ended on 31 December 2017 | ||||||
| Opening net book amount (1 July 2017) |
9,915 | 1,171,199 | - | 1,939 | - | 1,183,053 |
| Additions | 14,655 | (877) | 1,988 | - | - | 15,766 |
| Acquisition through business combination |
78 | - | 4,037 | - | - | 4,115 |
| Amortization charge | (2,658) | (33,222) | (316) | (129) | - | (36,326) |
| Impairment | - | (14,856) | - | - | - | (14,856) |
| Impairment reversal | - | 12,114 | - | - | - | 12,114 |
| Net book amount (31 December 2017) |
21,991 | 1,134,357 | 5,709 | 1,810 | - | 1,163,867 |
| Period that ended on 30 June 2018 | ||||||
| Opening net book amount (1 January 2018) |
21,991 | 1,134,357 | 5,709 | 1,810 | - | 1,163,867 |
| Additions | 9,239 | - | - | - | 100 | 9,339 |
| Amortization charge | (3,078) | (33,571) | (622) | (129) | - | (37,400) |
| Reclassification of depreciation | (105) | 105 | - | - | - | - |
| Net book amount (30 June 2018) |
28,047 | 1,100,891 | 5,087 | 1,680 | 100 | 1,135,805 |
| COMPANY | Software | Rights of games |
Other | Total | |||||
|---|---|---|---|---|---|---|---|---|---|
| Period that ended on 30 June 2017 | |||||||||
| Opening net book amount (1 January 2017) |
10,282 | 1,030,808 | - | 1,041,090 | |||||
| Additions | 1,037 | 877 | - | 1,914 | |||||
| Reclassification of assets to tangible assets |
710 | - | - | 710 | |||||
| Amortization charge | (3,610) | (24,970) | - | (28,580) | |||||
| Net book amount (31 December 2017) |
8,419 | 1,006,715 | - | 1,015,135 | |||||
| Year that ended on 31 December 2017 | |||||||||
| Opening net book amount (1 January 2017) |
8,419 | 1,006,715 | - | 1,015,135 | |||||
| Additions | 14,523 | (877) | - | 13,646 | |||||
| Amortization charge | (2,319) | (25,020) | - | (27,339) | |||||
| Net book amount (31 December 2017) |
20,623 | 980,818 | - | 1,001,442 | |||||
| Period that ended on 30 June 2018 | |||||||||
| Opening net book amount (1 January 2018) |
20,623 | 980,818 | - | 1,001,442 | |||||
| Additions | 8,965 | - | 100 | 9,065 | |||||
| Amortization charge | (2,657) | (24,942) | - | (27,599) | |||||
| Reclassification of depreciation | (105) | 105 | - | - | |||||
| Net book amount (30 June 2018) |
26,826 | 955,981 | 100 | 982,907 |
The opening balance for "rights of games" includes an amount of € 300,000 which constitutes a prepayment against the Company's GGR contribution to the Hellenic Republic for the period from 12.10.2020 to 12.10.2030. The future value of this prepayment, as prescribed in the relevant 2013 amendment to the supplementary Act of 12.12.2011 between the Hellenic State and OPAP S.A., amounts to € 1,831,200. The Group's additions within the first semester of 2018 relate mainly to software for player account
management of € 3,848 and software for VLTs of € 1,699. Additionally, an amount of € 2,682 relates to the upgrade for the platform of PAME STIHIMA.
Property, plant and equipment are analyzed as follows:
| GROUP | Land | Buildings | Machinery | Vehicles | Equipment | Construction in progress |
Total | ||
|---|---|---|---|---|---|---|---|---|---|
| Period that ended on 30 June 2017 | |||||||||
| Opening net book amount (1 January 2017) |
8,929 | 19,615 | 1,746 | 166 | 36,236 | 892 | 67,583 | ||
| Additions | - | 42 | 4,711 | - | 3,607 | 5,194 | 13,553 | ||
| Reclassification of assets from intangible assets |
- | - | 72 | - | 820 | (892) | - | ||
| Reclassification of assets to intangible assets |
- | - | - | - | (710) | - | (710) | ||
| Disposal | - | - | (183) | - | (294) | - | (476) | ||
| Depreciation charge | - | (1,325) | (355) | (20) | (5,662) | - | (7,361) | ||
| Disposals depreciation | - | - | 182 | - | 228 | - | 411 | ||
| Net book amount (30 June 2017) |
8,929 | 18,332 | 6,173 | 147 | 34,226 | 5,194 | 73,000 | ||
| Year that ended on 31 December 2017 | |||||||||
| Opening net book amount (1 July 2017) |
8,929 | 18,332 | 6,173 | 147 | 34,226 | 5,194 | 73,000 | ||
| Additions | - | 537 | 42,714 | - | 6,002 | (5,194) | 44,059 | ||
| Acquisition through business combination |
- | 288 | 29 | 18 | 202 | - | 537 | ||
| Reclassification of assets from intangible assets |
- | - | 2,905 | - | (2,905) | - | - | ||
| Disposal | - | - | (266) | (27) | (141) | - | (435) | ||
| Depreciation charge | - | (1,349) | (1,532) | (21) | (5,366) | - | (8,269) | ||
| Disposals depreciation | - | - | 254 | 12 | 139 | - | 406 | ||
| Net book amount (31 December 2017) |
8,929 | 17,808 | 50,275 | 129 | 32,157 | - | 109,298 | ||
| Period that ended on 30 June 2018 | |||||||||
| Opening net book amount (1 January 2018) |
8,929 | 17,808 | 50,275 | 129 | 32,157 | - | 109,298 | ||
| Additions | - | 245 | 3,937 | - | 9,632 | - | 13,814 | ||
| Disposal | - | (3) | (1,680) | (12) | (1,887) | - | (3,583) | ||
| Depreciation charge | - | (1,426) | (2,470) | (19) | (4,916) | - | (8,831) | ||
| Disposals depreciation | - | 1,680 | 3 | 1,884 | - | 3,567 | |||
| Net book amount (30 June 2018) |
8,929 | 16,624 | 51,742 | 100 | 36,870 | - | 114,265 |
| COMPANY | Land | Buildings | Machinery | Vehicles | Equipment | Construction in progress |
Total | ||
|---|---|---|---|---|---|---|---|---|---|
| Period that ended on 30 June 2017 | |||||||||
| Opening net book amount (1 January 2017) |
8,929 | 19,228 | 1,336 | 100 | 14,712 | 892 | 45,196 | ||
| Additions | - | 29 | 4,711 | - | 3,452 | 5,194 | 13,385 | ||
| Reclassification of assets from intangible assets |
- | - | 72 | - | 820 | (892) | - | ||
| Reclassification of assets to intangible assets |
- | - | - | - | (710) | - | (710) | ||
| Disposals | - | - | (182) | - | (232) | - | (414) | ||
| Depreciation charge | - | (1,309) | (309) | (13) | (3,370) | - | (5,001) | ||
| Depreciation disposals | - | - | 182 | - | 228 | - | 410 | ||
| Net book amount (30 June 2017) |
8,929 | 17,948 | 5,809 | 88 | 14,900 | 5,194 | 52,867 | ||
| Year that ended on 31 December 2017 | |||||||||
| Opening net book amount (1 July 2017) |
8,929 | 17,948 | 5,809 | 88 | 14,900 | 5,194 | 52,867 | ||
| Additions | - | 328 | 42,547 | - | 2,151 | (5,194) | 39,832 | ||
| Reclassification of assets from intangible assets |
- | - | 2,905 | - | (2,905) | - | - | ||
| Disposals | - | - | (266) | - | (139) | - | (405) | ||
| Depreciation charge | - | (1,304) | (1,478) | (13) | (2,897) | - | (5,692) | ||
| Depreciation disposals | - | - | 254 | - | 138 | - | 392 | ||
| Net book amount (31 December 2017) |
8,929 | 16,972 | 49,770 | 75 | 11,248 | - | 86,994 | ||
| Period that ended on 30 June 2018 | |||||||||
| Opening net book amount (1 January 2017) |
8,929 | 16,972 | 49,770 | 75 | 11,248 | - | 86,994 | ||
| Additions | - | 14 | 3,487 | - | 4,582 | - | 8,083 | ||
| Disposals | - | (3) | (1,680) | (12) | (1,887) | - | (3,583) | ||
| Depreciation charge | - | (1,371) | (2,383) | (12) | (2,318) | - | (6,084) | ||
| Depreciation disposals | - | 1,680 | 3 | 1,884 | - | 3,567 | |||
| Net book amount (30 June 2018) |
8,929 | 15,611 | 50,874 | 53 | 13,509 | - | 88,976 |
The Group's first semester 2018 'machinery' additions include, among others:
a. devices such as terminals, printers, monitors etc. of € 1,329 purchased within the framework of OPAP's
IT transformation project
b. expenses of € 738 relating to SSBTs purchases and
c. expenses of € 1,419 relating to the purchase of i-links for the installation of the VLTs in OPAP's network.
Moreover, the additions of 'equipment' include, mainly, the acquisition of peripherals of € 3,462 as well as purchase of telecommunication equipment for the OPAP network (Opap Stores) of € 4,813. Property, plant & equipment of the Group and the Company have not been pledged.
The subsidiaries of the Company included in the condensed interim financial statements are the following:
| Consolidated subsidiary |
% of investment |
Acquisition cost 30.06.2018 |
Acquisition cost 31.12.2017 |
Country of incorporation |
Principal activities | Consolidation basis |
|---|---|---|---|---|---|---|
| OPAP CYPRUS LTD | 100% | 1,704 | 1,704 | Cyprus | Numerical lottery games |
Full consolidation |
| OPAP INTERNATIONAL LTD |
100% | 10,173 | 10,173 | Cyprus | Holding Company | Full consolidation |
| OPAP SERVICES S.A. | 100% | 22,813 | 22,813 | Greece | Services | Full consolidation |
| OPAP SPORTS LTD | 100% | 9,650 | 9,650 | Cyprus | Sports betting Company |
Full consolidation |
| OPAP INVESTMENT LTD |
100% | 218,587 | 237,604 | Cyprus | Holding Company | Full consolidation |
| Total | 262,927 | 281,945 |
At the Company's standalone financial statements, investments in subsidiaries are accounted for at cost less any impairment.
The investment of OPAP S.A. to OPAP INVESTMENT LTD at 30.06.2018 was decreased by € 19,018, compared to 31.12.2017, due to share capital decrease.
The analysis of cash and cash equivalents is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| Cash in hand | 4,042 | 11,191 | 1,387 | 2,697 |
| Short term bank deposits | 175,783 | 234,911 | 46,060 | 91,574 |
| Total | 179,825 | 246,102 | 47,447 | 94,270 |
Short term bank deposits comprise current accounts and time deposits. The effective interest rates are based on floating rates and are negotiated on a case by case basis. Short term bank deposits include restricted cash of € 979 (2017: € 941), mainly due to guarantees received from the agents and liabilities to suppliers, which is analysed as follows: OPAP S.A. € 152, OPAP CYPRUS LTD € 806 and OPAP SERVICES S.A. € 20.
The deposits held by the Company in Greek credit institutions are subject to restrictions of cash withdrawal and working capital transfers, as established with the Act of legislative content 65/28.06.2015 and applied in accordance with the relevant ministerial decisions.
Finally, the Group retains part of its deposits at European reputable financial institutions.
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| Receivables from debtors (revenues from games) |
83,068 | 108,480 | 26,570 | 43,654 |
| Receivables from debtors (accounts under arrangement from agencies) |
151 | 133 | 35 | 35 |
| Doubtful receivables from agents | 35,592 | 34,292 | 34,601 | 33,716 |
| Other receivables | 23,191 | 20,189 | 9,172 | 10,911 |
| Sub total short term trade receivables | 142,002 | 163,093 | 70,379 | 88,316 |
| Less provisions for bad and doubtful debts and for accounts under arrangement |
(37,077) | (35,264) | (35,022) | (33,956) |
| Total short term trade receivables | 104,925 | 127,829 | 35,357 | 54,360 |
| Long term receivables from agencies (accounts under arrangement) |
2 | 2 | 2 | 2 |
| Total long term trade receivables | 2 | 2 | 2 | 2 |
| Total trade receivables | 104,927 | 127,831 | 35,359 | 54,362 |
Management considers that the Group's main credit risk arises from doubtful receivables from agents. The Group, in order to cover this risk, increased the provision for doubtful debts by € 1,828 due to the additional provisions that were formed by OPAP S.A. of € 1,066, by TORA DIRECT S.A. of € 24, by HELLENIC LOTTERIES S.A. of € 724 and by OPAP SERVICES of € 14, according to IFRS 9 requirements.
The analysis of other current assets is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| Income tax receivables | - | 12,106 | - | 12,106 |
| Housing loans to personnel | 55 | 56 | 55 | 56 |
| Other receivable-revenue receivable | 17,756 | 22,920 | 9,873 | 9,486 |
| Prepaid expenses | 8,943 | 12,007 | 5,916 | 7,325 |
| Intercompany transaction of winners profits with OPAP CYPRUS LTD |
- | - | 2,610 | 924 |
| Receivables from taxes | 12,079 | 11,443 | - | - |
| Total | 38,833 | 58,532 | 18,455 | 29,896 |
OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800
Income tax receivables at 31.12.2017 include income tax receivable of the Company amounting to € 12,106 as the prepaid amount relating to income tax for the year 2017 recorded with the submission of the tax return for the year 2016 was higher compared to the income tax provision recorded for the respective year.
The Group's and Company's borrowing is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| Total long-term loans | 650,883 | 513,098 | 601,214 | 467,342 |
| Short-term loans | ||||
| Current portion of long term loans | - | 169,000 | - | 169,000 |
| Short-term loans (overdraft accounts) | 583 | 171 | 176 | 171 |
| Total short-term loans | 583 | 169,171 | 176 | 169,171 |
| Total loans | 651,466 | 682,269 | 601,390 | 636,513 |
The analysis of the Group's debt is as follows:
| 31.12.2017 | 30.06.2018 | ||||||
|---|---|---|---|---|---|---|---|
| Description | Year of maturity |
Book value |
New Loans |
Repayments | Amortization of expenses |
Outstanding nominal value |
Book value |
| Bond Loan, amount € 250,000 | 2023 | - | 250,000 | - | (1,177) | 250,000 | 248,823 |
| Bond Loan, amount € 200,000 | 2022 | 196,798 | - | - | 348 | 200,000 | 197,146 |
| Bond Loan, amount € 100,000 | 2021 | 100,000 | - | (100,000) | - | - | - |
| Bond Loan, amount € 45,000 | 2020 | 40,500 | - | (40,500) | - | - | - |
| Bond Loan, amount € 5,000 | 2020 | 5,000 | - | - | - | 5,000 | 5,000 |
| Bond Loan, amount € 50,000 | 2020 | 49,771 | - | - | 42 | 50,000 | 49,813 |
| Bond Loan, amount € 100,000 | 2020 | 99,273 | - | - | 118 | 100,000 | 99,390 |
| Bond Loan, amount € 50,000 | 2019 | 40,000 | 10,000 | - | - | 50,000 | 50,000 |
| Bond Loan, amount € 75,000 | 2018 | 75,000 | - | (75,000) | - | - | - |
| Bond Loan, amount € 75,000 | 2018 | 75,000 | - | (75,000) | - | - | - |
| Overdraft, amount € 500 | - | 472 | (65) | - | 407 | 407 | |
| Overdraft, amount € 15,000 | 171 | 5 | - | - | 176 | 176 | |
| Overdraft, amount € 2,000 | 756 | - | (46) | - | 710 | 710 | |
| Total | 682,269 | 260,477 | (290,611) | (669) | 656,293 | 651,466 |
The analysis of the Company's loans is as follows:
| 31.12.2017 | 30.06.2018 | ||||||
|---|---|---|---|---|---|---|---|
| Description | Year of maturity |
Book New Repayments value Loans |
Amortization of expenses |
Outstanding nominal value |
Book value |
||
| Bond Loan, amount € 250,000 | 2023 | - | 250,000 | - | (1,177) | 250,000 | 248,823 |
| Bond Loan, amount € 200,000 | 2022 | 196,798 | - | - | 348 | 200,000 | 197,146 |
| Bond Loan, amount € 100,000 | 2021 | 100,000 | - | (100,000) | - | - | - |
| Bond Loan, amount € 45,000 | 2020 | 40,500 | - | (40,500) | - | - | - |
| Bond Loan, amount € 50,000 | 2020 | 49,771 | - | - | 42 | 50,000 | 49,813 |
| Bond Loan, amount € 100,000 | 2020 | 99,273 | - | - | 118 | 100,000 | 99,390 |
| Bond Loan, amount € 75,000 | 2018 | 75,000 | - | (75,000) | - | - | - |
| Bond Loan, amount € 75,000 | 2018 | 75,000 | - | (75,000) | - | - | - |
| Bond Loan, amount € 6,041 | - | 6,041 | - | - | 6,041 | 6,041 | |
| Overdraft, amount € 15,000 | 171 | 5 | - | - | 176 | 176 | |
| Total | 636,513 | 256,046 | (290,500) | (669) | 606,217 | 601,390 |
The average interest rate of the Group and the Company for the first half of 2018 is 3.4% (2017: 3,9%). The above loan agreements do not contain mortgages and pledges on the assets of the Group and the Company.
As at 30.06.2018 the employee benefit plans include:
The Board of Directors of the Company, following a recommendation of the Remuneration and Nomination Committee, on 28.3.2017, approved a Long term incentive scheme with distribution of part of the Company's net profits to Executive Members of the BoD and other Key Management Personnel of the Company. The program's duration is 3 years, for the period 2017-2019. The targets relate to a. the profitability of the Company for the 3 year period mentioned above and b. the Company's share price increase in the Athens Stock Exchange. Finally, the scheme defines that the maximum amount to be distributed to up to 30 beneficiaries is € 7,000.
As of 30.06.2018 the liability related to the above scheme amounts to € 1,709 for both the Company and the Group.
Under Greek labor law (L.2112/1920), employees are entitled to termination payments in the event of retirement with the amount of payment varying in relation to the employee's compensation and length of service. The liability arising from the above obligation is actuarially valued by an independent firm of actuaries. The last actuarial valuation was undertaken in December 2017.
As at 30.06.2018, the liability related to the above plan amounts to €2,189 for the Group and to € 1,771 for the Company.
As a result, the liability relates to the Employee benefit plans in total, amounts to € 3,898 for the Group and to € 3,480 for the Company.
The Group's and the Company's provisions are analyzed as follows:
| GROUP | COMPANY | |
|---|---|---|
| Balance as at 31 December 2017 | 31,187 | 29,773 |
| Provisions for the period | 1,013 | 1,013 |
| Provision reversal | (569) | (569) |
| Used provision | (697) | (697) |
| Balance as at 30 June 2018 | 30,935 | 29,521 |
Part of the amount of € 30,935 (2017: € 31,187), specifically € 29,084 (2017: € 29,337), relates mainly to provisions recorded against losses from lawsuits by third parties, agents and employees against the Company, while an amount of € 1,258 (2017: € 1,258) relates to the cumulative provision for tax differences of OPAP SERVICES S.A.. The provision is considered to be adequate by the Management.
Provision movements in the current period are exclusively related to the Company and are connected to the aforementioned lawsuits.
The analysis of trade payables is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| Suppliers (services, assets, etc.) | 41,107 | 69,131 | 21,073 | 47,516 |
| Payout to the winners and retained earnings |
73,229 | 92,527 | 18,940 | 27,735 |
| Other payables (salaries – subsidies) | 16,308 | 12,201 | 4,466 | 1,753 |
| Total | 130,645 | 173,860 | 44,479 | 77,005 |
OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800
Trade payables present a significant variation compared to prior year figures mainly, due to the settlement of players' winnings in 2018 of New Year's Eve and National Lottery, which draws were performed in December 2017.
The analysis of tax liabilities is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| Income tax liabilities | 17,962 | 2,370 | 13,909 | - |
| Contribution on the net revenues | 41,572 | 53,022 | 34,087 | 43,524 |
| Other taxes (withholding, VAT, etc.) | 14,521 | 34,379 | 16,894 | 34,885 |
| Total | 74,055 | 89,771 | 64,890 | 78,409 |
Income tax receivables at 31.12.2017 include income tax receivable of the Company amounting to € 12,106 as the prepaid amount relating to income tax for the year 2017 recorded with the submission of the tax return for the year 2016 was higher compared to the income tax provision recorded for the respective year. The decrease of other taxes at both, the Group and Company level, is mainly attributed to the payment of € 23,300 relating to withholding tax on dividends distributed.
According to L. 4389/2016, a 35% contribution has been imposed on OPAP's revenue (amounts wagered minus players' winnings) as at 01.01.2016, instead of 30% that was applicable since 01.01.2013 as per L. 4093/2012.
Regarding VLTs, the rate of the Greek State's participation on OPAP's revenue may increase from the stipulated 30% up to five percentage points, reaching a maximum of 35%, as per L. 4002/2011 as amended by L. 4093/2012.
Moreover, based on the Betting Tax of Cyprus introduced in 2012, a betting tax of 13% is imposed on GGR of Opap Sports Ltd.
Finally, based on the interstate agreement between Greece and Cyprus, a special levy is paid to the Cypriot State from Opap Cyprus Ltd.
Total Group GGR contribution for the six month period of the current year amounts to € 241,997 (2017: € 229,241) and for the Company's to € 210,787 (2017: € 196,565).
For the Company, agent commissions since April 2017, when the new contract with the agents came into force, are calculated as a percentage on Net Gaming Revenue (NGR) and not as a percentage on wagers. For all other companies of the Group, agents' commissions are calculated as percentage on wagers depending on the game and especially for HELLENIC LOTTERIES S.A, the sales' channel. (wholesalers, mini markets, OPAP S.A. sales' network etc.).
The relevant kind of commission refers to the entities of the Group which operate in the gaming sector and their level is determined in line with the gaming activity as a percentage on net gaming revenue (NGR) or, in a few cases, on wagers or gross gaming revenue (GGR). The variation compared to the previous year is attributed to the most recently launched games of the Group, namely VLTs and Virtual games.
The analysis of other operating income is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Period that ended on June 30, | 2018 | 2017 | 2018 | 2017 |
| Revenues from prepaid cards and mobile top-ups |
42,784 | 39,612 | - | - |
| Income from IT services | 3,989 | - | - | - |
| Management fees | - | - | 14,891 | 14,762 |
| Other income | 12,985 | 11,540 | 3,593 | 2,789 |
| Total | 59,758 | 51,152 | 18,484 | 17,551 |
Group income from IT services is attributed to subsidiary NEUROSOFT S.A. which is fully consolidated since 02.08.2017.
The analysis of other operating cost is as follows:
| Period that ended on June 30, | 2018 | 2017 | 2018 | 2017 |
|---|---|---|---|---|
| Consumption of prepaid cards and mobile top-ups |
39,310 | 35,877 | - | - |
| Cost of Gaming Halls sold | 3,666 | 6,821 | - | - |
| Consumption of inventory for the production and development of IT information systems |
354 | - | - | - |
| Total | 43,329 | 42,698 | - | - |
The analysis of payroll expenses is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Period that ended on June 30, | 2018 | 2017 | 2018 | 2017 |
| Wages and salaries | 30,412 | 25,020 | 24,944 | 21,942 |
| Social security costs | 6,438 | 4,927 | 5,276 | 4,280 |
| Other staff costs | 571 | 545 | 477 | 462 |
| Employee benefit plans | 829 | 1,356 | 760 | 1,312 |
| Termination compensations | 116 | 120 | 116 | 82 |
| Total | 38,366 | 31,968 | 31,573 | 28,077 |
The number of employees of the Company as at 30.06.2018 and 30.06.2017 is 1,086 and 970, respectively, while the employees of the Group as at 30.06.2018 and 30.06.2017 are 1,459 and 1,172 respectively.
Employee benefit plans of the Group and the Company include any termination payments to employees in the event of retirement based on IAS 19 of € 233 and € 164, respectively, as well as the cost of the long term incentive scheme to key management personnel of the Company of € 596.
Marketing expenses are as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Period that ended on June 30, | 2018 | 2017 | 2018 | 2017 |
| CSR and sponsorships | 12,158 | 13,500 | 8,127 | 9,628 |
| Advertising | 22,248 | 20,897 | 16,213 | 14,230 |
| Total | 34,406 | 34,397 | 24,340 | 23,858 |
Marketing expenses of the current period for both, Group and Company level, are not significantly differentiated from the previous period as a result of Management's decision to keep this kind of expenditure stable.
The analysis of other operating expenses is as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Period that ended on June 30, | 2018 | 2017 | 2018 | 2017 |
| IT related costs | 25,196 | 24,799 | 26,358 | 23,244 |
| Utilities & Telecommunication costs | 6,619 | 7,899 | 4,767 | 6,796 |
| Rentals | 5,184 | 3,829 | 3,097 | 2,167 |
| Other | 34,523 | 41,290 | 21,004 | 31,213 |
| Inventory consumption | 2,780 | 3,090 | 2,609 | 2,919 |
| Total | 74,301 | 80,907 | 57,836 | 66,338 |
Other operating expenses of the current period vary significantly, compared to the relevant period of the previous year as a result of a litigation provision made by the Company of € 12,122 on June 2017 while, the respective expense for 2018 amounts to € 444. At Group level, the respective provision for the current period equals to the Company's one while, for the previous year amounted to € 12,093.
Financial results are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Period that ended on June 30, | 2018 | 2017 | 2018 | 2017 |
| Interest and expenses of bond loans | (12,373) | (10,922) | (11,341) | (9,609) |
| Other financial expenses | (1,124) | (685) | (709) | (225) |
| Capital cost of pension plans | (31) | (9) | (31) | (9) |
| Finance expenses | (13,529) | (11,617) | (12,081) | (9,843) |
| Bank deposits | 705 | 974 | 363 | 664 |
| Personnel loans | 2 | 2 | 131 | 2 |
| Other financial income | 418 | 521 | 8 | 22 |
| Finance income | 1,125 | 1,496 | 502 | 688 |
| Net finance expenses recognized in income statement |
(12,404) | (10,120) | (11,579) | (9,155) |
The Interest and expenses of bond loans, both for the Company and the Group, are presented increased during the first six months of 2018 compared to the respective period of 2017 due to the Company's bond loan of € 200,000 issued on 21.03.2017.
The income tax expense charged to the statement of profit or loss and other comprehensive income is analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Period that ended on June 30, | 2018 | 2017 | 2018 | 2017 |
| Current income tax expense | (27,571) | (24,455) | (25,879) | (22,103) |
| Deferred tax | (4,827) | (1,149) | (4,492) | 267 |
| Total tax expense | (32,399) | (25,604) | (30,372) | (21,836) |
| Actual tax rate | 32.8% | 33.6% | 31.3% | 27.2% |
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Period that ended on June 30, | 2018 | 2017 | 2018 | 2017 |
| Deferred tax | 137 | - | 137 | - |
| Total | 137 | - | 137 | - |
At the Company level, the decreased effective tax rate of 27.2% versus the current domestic tax rate of 29% as at 30.06.2017 is mainly, attributed to the favorable difference between the estimated and the actually charged income tax for the year 2016, paid in the first semester of 2017. On the contrary, the increased effective tax rate of 31.3% as at 30.06.2018 is attributed to the permanent differences such as bad debt provisions for which no deferred taxation is recognized and additionally, to the extra income tax expense of € 575 as a result of the completion of the tax audit relating to the year 2012 by the tax authorities.
At Group level, the variation of the effective tax rate compared to the current domestic tax rate (29%) is mainly attributed to the fact that no deferred tax asset is recognized for the tax losses incurred by certain Group subsidiaries.
The term "related parties" includes not only the Group's companies, but also companies in which the parent participates in their share capital with a significant percentage, companies that belong to parent's main shareholders, companies controlled by members of the BoD or key management personnel, as well as close members of their family.
The Group's and the Company's income and expenses for the first six months of 2018 and 2017 as well as the balances of receivables and payables for the same period that have arisen from related parties' transactions, as defined by IAS 24 are analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Income | 01.01- 30.06.2018 |
01.01- 30.06.2017 |
01.01- 30.06.2018 |
01.01- 30.06.2017 |
| Subsidiaries | - | - | 15,987 | 21,485 |
| Total | - | - | 15,987 | 21,485 |
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Expenses | 01.01- | 01.01- | 01.01- | 01.01- |
| 30.06.2018 | 30.06.2017 | 30.06.2018 | 30.06.2017 | |
| Subsidiaries | - | - | 5,827 | 1,911 |
| Associates | 1,472 | 3,854 | 1,472 | 3,854 |
| Total | 1,472 | 3,854 | 7,299 | 5,764 |
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Receivables | 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 |
| Subsidiaries | - | - | 31,488 | 32,756 |
| Associates | - | - | - | - |
| Total | - | - | 31,488 | 32,756 |
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| Payables | 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| Subsidiaries | - | - | 8,211 | 5,440 | |
| Associates | 269 | 600 | 269 | 600 | |
| Total | 269 | 600 | 8,481 | 6,040 |
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Transactions and salaries of executive and administration members |
01.01- 30.06.2018 |
01.01- 30.06.2017 |
01.01- 30.06.2018 |
01.01- 30.06.2017 |
| BoD and key management personnel | 6,398 | 5,428 | 4,745 | 4,213 |
| Total | 6,398 | 5,428 | 4,745 | 4,213 |
The remuneration of the BoD and key management personnel of the Group is analyzed as follows:
a) the Group's BoD compensation, reached € 505 for the first semester of 2018 and € 408 for the first semester of 2017 and
b) the Group's key management personnel remuneration, reached € 5,893 for the first semester of 2018 and € 5,019 for the first semester of 2017.
The remuneration of the BoD and key management personnel of the Company is analyzed as follows:
| GROUP | COMPANY | |||
|---|---|---|---|---|
| Liabilities from BoD compensation & remuneration |
30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 |
| BoD and key management personnel | 1,109 | 450 | 906 | 342 |
| Total | 1,109 | 450 | 906 | 342 |
The balance from management's remuneration and Board of Directors' compensation refers to:
All the inter-company transactions and balances of the above have been eliminated in the consolidated financial statements of the Group.
OPAP S.A.'s Legal Department estimations concerning legal claims against OPAP S.A., for which a negative outcome is likely, result in a provision, including interest, for the Company amounting to € 29,084 and for the Group to € 29,172, while the total amount of these claims for the Company amounts to € 29,460 and for the Group to € 30,400.
The total cumulative provision on 30.06.2018 is analyzed as follows:
| GROUP | COMPANY | ||||
|---|---|---|---|---|---|
| 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | ||
| Labor disputes | 7.480 | 7.110 | 7.392 | 7.022 | |
| Lawsuits from individuals or legal entities | 21.692 | 22.315 | 21.692 | 22.315 | |
| Total provision | 29.172 | 29.425 | 29.084 | 29.337 |
Furthermore, according to the Legal Counsel, third party lawsuits against the Group have been filed for a total claim of € 100,269, for which the outcome is estimated as positive for the Group and consequently, no provisions were required.
There are no other pending or outstanding differences related to the Company or the Group as well as court or other administrative authorities' resolutions that might have a material effect on the financial statements or the operation of the Company and its subsidiaries.
The eighteenth (18th) Annual Ordinary Shareholders General Meeting of OPAP S.A. that took place on Wednesday, 25.04.2018, approved the distribution of earnings and decided upon the distribution of a total gross dividend of 0.40 euro per share prior to the tax withhold for the fiscal year 2017. Since the amount of 0.10 euro per share had already been distributed to the shareholders as interim dividend pursuant to the relevant decision of the Company's Board of Directors, the remaining dividend for the fiscal year 2017, which has been distributed, amounts to 0.30 euro per share prior to the relevant tax withhold. Eligible to receive the dividend are OPAP's registered shareholders on Wednesday, 08.05.2018 (record-date).
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuing technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
During the period there were no transfers between level 1 and level 2 fair value measurement, and no transfers into and out of level 3 fair value measurement.
The following tables compare the carrying amount of the Group's and the Company's financial instruments that are carried at amortized cost to their fair value:
| Carrying value | Fair value | ||||
|---|---|---|---|---|---|
| GROUP | 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 | |
| Financial assets | |||||
| Trade receivables | 104,925 | 127,831 | 104,925 | 127,831 | |
| Cash and cash equivalents | 179,825 | 246,102 | 179,825 | 246,102 | |
| Housing loans to personnel | 273 | 291 | 273 | 291 | |
| Guarantee deposits | 1,234 | 1,172 | 1,234 | 1,172 | |
| Prepayments of retirement benefits | 221 | 221 | 221 | 221 | |
| Financial liabilities | |||||
| Long term loans | 650,883 | 513,098 | 655,177 | 518,898 | |
| Short term loans | 583 | 169,171 | 583 | 169,171 | |
| Trade payables | 130,645 | 173,860 | 130,645 | 173,860 | |
| Accrued financial expenses | 2,772 | 4,378 | 2,772 | 4,378 | |
| Liabilities arising from derivatives (swap) | 687 | 214 | 687 | 214 |
| Carrying value | Fair value | |||
|---|---|---|---|---|
| COMPANY | 30.06.2018 | 31.12.2017 | 30.06.2018 | 31.12.2017 |
| Financial assets | ||||
| Trade receivables | 35,357 | 54,362 | 35,357 | 54,362 |
| Cash and cash equivalents | 47,447 | 94,270 | 47,447 | 94,270 |
| Housing loans to personnel | 273 | 291 | 273 | 291 |
| Guarantee deposits | 971 | 921 | 971 | 921 |
| Prepayments of retirement benefits | 221 | 221 | 221 | 221 |
| Financial liabilities | ||||
| Long term loans | 601,214 | 467,342 | 605,508 | 473,142 |
| Short term loans | 176 | 169,171 | 176 | 169,171 |
| Trade payables | 44,479 | 77,005 | 44,479 | 77,005 |
| Accrued financial expenses | 2,570 | 4,219 | 2,570 | 4,219 |
| Liabilities arising from derivatives (swap) | 687 | 214 | 687 | 214 |
The fair value of long-term and short-term loans is determined on the basis of quoted (unadjusted) prices. The fair value of other financial assets and financial liabilities approximates their carrying amounts.
Next, we present the main risks and uncertainties which the Group is exposed.
From a macroeconomic perspective, the completion of the economic adjustment programs of the Greek economy in August set the grounds for the economy's stabilization that, in conjunction with the upgrade of Greece's creditworthiness, enhances the expectations for the economy's return to a sustainable development path. Nonetheless, the context of post-memorandum surveillance, the difficulties and the constraints towards the return to money markets as well as the turbulence in international markets raise concerns about the prospects of the Greek economy in the short-term and may negatively affect business activity, operating results and the overall financial position of the Group.
The Group's activity is significantly affected by the disposable income, private consumption, which in turn are affected by the current economic conditions in Greece, such as the unemployment rate, interest rates, inflation rate, tax rate and the increase in GDP rate. Moreover, the economic recession, financial uncertainty and a number of the Group's customers potential interpretation that the economic conditions are deteriorating, could result in a decrease of the usage of the various gaming services that the Group offers to the public.
Any negative development in the economy would affect the normal operations. However, Management is continually adjusted to the situation and ensures that all necessary actions are taken to maintain undisturbed activities.
The gaming sector in Greece is intensively regulated by the Hellenic Gaming Commission. The Greek authorities have the right to unilaterally alter the legislative and regulatory framework that governs the manner and modus operandi of the games that the Group offers.
The developments in the Greek regulatory framework, drive evolving regulatory challenges for the Group. Changes in the regulatory environment may have a substantial impact, through restricting betting activities or changing compliance costs and taxes.
OPAP consistently complies with regulatory standards, while understands and addresses changing regulatory requirements in an efficient and effective manner. Additionally, a potential failure on the Group's part to comply with the governing rules and the regulatory framework, as well as the enactment of new laws or/and further regulatory enforcement could have a negative impact on the Group's business activities. Additionally, restrictions on advertising can reduce the ability to reach new customers, thus impacting the implementation of the strategic objectives to focus on sustainable value increase.
OPAP is actively engaging and maintaining dialogue with authorities, regulators and other key stakeholders, to continually monitor the changing regulatory/legal landscape and through appropriate policies, processes and controls to achieve a rational and balanced gaming regulation.
The Group's business activities and the sector in which it does business are subject to various taxes and charges, such as the special contribution regarding games which is calculated based on the gross gaming revenue, the tax on players' winnings and the income tax of legal entities.
The Company is exposed to the risk of changes to the existing gaming taxation status or the gaming tax rates, creating unexpected increased costs for the business and impacting the implementation of Group's strategic objectives for sustainable revenues and additional investments. The Company is seeking to promptly respond to any potential tax changes, by maintaining the required tax planning resources and developing contingency plans so as to implement the required mitigating actions and to minimize the overall impact.
Market risk arises from the possibility that changes in market prices such as exchange rates and interest rates affect the results of the Group and the Company or the value of financial instruments held. The management of market risk consists in the effort of the Group and the Company to control their exposure to acceptable limits.
Currency risk is the risk that the fair values of the cash flows of a financial instrument fluctuate due to foreign currency changes. The Group operates in Greece and Cyprus and there are not any agreements with suppliers in currencies other than in euro. All revenues from games are in euro, transactions and costs are denominated or based in euro, subsequently, there is not any substantial foreign exchange risk. Additionally, the vast majority of the Group's cost base is, either proportional to its revenues (i.e. payout to winners, agents commission) or to transactions with domestic companies (i.e. IT, marketing).
The Group is exposed to interest rate risk principally in relation to outstanding debt. The existing debt facilities, as of 30.06.2018, stand at € 651,466 and € 601,390 for the Group and the Company respectively. The Group follows all market developments with regards to the Interest rate environment and acts accordingly. On 30.06.2018 the Group is exposed to Interest rate risk on € 106,107 of debt as the remaining €99,390 are hedged via an interest rate swap and € 445,969 are with fixed interest rate.
The primary objective of the Group and the Company relating to capital management, is to ensure and maintain strong credit ability and healthy capital ratios to support the business plans and maximize value for the benefit of shareholders. The Group has improved materially its capital structure and maintains a healthy net debt/EBITDA ratio of 1.4x as of 30.06.2018. In addition, it retains an efficient cash conversion cycle thus optimizing the operating cash required in order to secure its daily operations, while diversifying its cash reserves so as to achieve flexible working capital management within the domestic capital control environment.
The Group manages the capital structure and makes the necessary adjustments to conform to changes in business and economic environment in which they operate. The Group and the Company in order to optimize the capital structure, may adjust the dividend paid to shareholders, return capital to shareholders or issue new shares.
The Group's exposure to credit risk arises mainly from agents' bad debts as well as from the debts of agents for which arrangements have been made. The main credit risk management policy is the establishment of credit limits per agent. Additionally, the Group is taking all necessary steps to mitigate credit risk exposure towards financial institutions. The Group is also exposed towards credit risk in respect of entities with which it has deposited funds or with which it has other contractual relationships. The Group manages credit risk exposure to its agents through various practices. Each agent is required to provide the Group with a warranty deposit as a guarantee. These deposits are aggregated and are available in the event of a default in payment by any agent. In addition, a maximum amount that an agent may owe during each settlement period has been imposed. If the amounts owed by an agent exceed the relevant limit during any settlement period, the agent's terminal is automatically blocked from accepting wagers.
OPAP S.A. | 112 Athinon Ave, 104 42 Athens, Greece, Tel: +30 (210) 5798800 The Group manages liquidity risk by managing betting games' payout ratio and the proper design of each game. With the exception of fixed-odds sports betting games, all of the remaining games have a theoretical payout (relating to prizes normally attributed to winners) based on each game's mathematics. As the theoretical payout is calculated on a very large number of draws, small deviations may occur in some of the numerical games in shorter time frames. For example, Kino is a fixed odds game that statistically distributes approximately 69.5% of net receivables to the winners, with deviations mostly around 1%. The Group manages liquidity risk by limiting the size of player winnings. For example, Kino has a maximum prize of € 1,000. Maximum winnings/column are also defined for Stihima, a fixed odds betting game in which winning depends on correctly guessing the results of sporting events, and other events that by their nature allow for wagering. For Stihima game a comprehensive risk management
methodology is implemented at different stages of the sport-betting cycle, setting different limits and odds per sport, league and game while treating each event differently. At any given time, bets placed are tracked, received and accepted or not accepted. In addition, the trading team can also monitor any high bets placed and negotiate with the bettor so that the bet is within the approval limits. Finally, proper software is used to find, in real-time, suspicious betting patterns and cases for sure bets or arbitrage opportunities.
Reliability and transparency in relation to the operation of the games are ensured by several security measures designed to protect information technology systems from breaches in security such as illegal retrieval and illegal storage of data and accidental or intentional destruction of data. Security measures cover data processing systems, software applications, the integrity and availability of data and the operation of the on-line network. Additionally, all critical business applications that relate to game operation and availability are hosted in systems that guarantee high availability, including transferring to a Backup Computer System if deemed necessary. Moreover, a critical evaluation of all systems is conducted – whether they are directly related to game availability or not – so that they can be integrated into the Disaster Recovery Plan, if deemed necessary. All applications are integrated in a security backup creation system according to their significance.
In October 2017, the Attorney General delivered to the Auditor General and following his request, an opinion by which OPAP CYPRUS LTD supposedly does not pay to the Republic of Cyprus the amounts due under the Bilateral Treaty by making a new interpretation of the Bilateral Treaty, totally different from the interpretation given by the Republic of Cyprus throughout the duration of the Bilateral Treaty since 2003. The General Accountant of the Republic of Cyprus, who is authorized under the Bilateral Treaty to audit the accounts of OPAP CYPRUS LTD, took a different position from the Attorney General supporting the way OPAP CYPRUS LTD calculated its contributions to the Republic of Cyprus. No claim has been made to-date against OPAP CYPRUS LTD and OPAP S.A. is convinced that the interpretation of the Attorney General is unfounded.
OPAP CYPRUS LTD operates in Cyprus on the basis of the 2003 bilateral treaty ("BT") between the Republic of Cyprus and the Hellenic Republic. The BT may be terminated by either State, by serving to the other State 12 month prior notice.
The Law 51(Ι) 2018 entitled "2018 Law on Certain Games of Chance" was voted by the Cypriot Parliament on 18 May 2018 and published in the Government Gazette. According to such law, a special committee will run the concession process and submit a proposal to the Minister of Finance for the selection of the
appropriate operator to be granted with the exclusive license regarding the offer of certain numeric games of chance in the Republic of Cyprus. This Committee shall first proceed to a suitability assessment of the current operator, i.e. OPAP CYPRUS LTD. If the existing operator is not found suitable for being granted an exclusive license, the Committee shall ask expression of interest from up to five (5) interested parties. The prospective operator will sign a concession agreement with Republic of Cyprus and will be granted with an exclusive, non-transferable license. The games licensed, to be specified in the concession agreement, shall fall into the following categories: (a) "numeric lotteries", which refer to the exact prediction of random numbers being the result of a draw; and (b) non-fixed odds games, based on the exact result of combination of results of sports events.
As a result of the two new introduced lines in the Income Statement:
and additionally, for the better presentation and comparativeness between the periods, the Group and the Company proceeded to reclassifications of specific amounts in the Income Statement for the period that ended on 30.06.2018. Specifically, in 'Other NGR related commission' was reclassified from the 'IT related cost' the amount of € 9,698 for the Group and € 6,773 for the Company and from 'Other' the amount of € 5,960 for the Group and € 814 for the Company. In 'Other operating cost' was reclassified from the 'Inventory consumption' the amount of € 35.877 for the Group when for the Company it was not necessary such a reclassification. Moreover, the amount of € 3,159 for the Group and € 3,843 for the Company was reclassified from 'Advertising' to 'Other' expenses. Finally, during the preparation of the Income Statement of the period that ended on 30.06.2017, regarding income and expenses of the same nature i.g VLTs, the set-off method was adopted by the Group and the Company but it was cancelled for the preparation of the current period. As a result, the Group's 'Other operating income' of the comparative period increased by € 8,475 and at the same time the related expenses were adjusted accordingly. More specifically, the 'Rentals' were increased by € 403, the 'Other' expenses by € 1,251 and the 'Other operating cost' by € 6,821. At Company level, the increase in the 'Other operating income' was € 503, in the 'Rentals' was € 403 and finally, in the 'Other' expenses was € 100.
The Company's Board of Directors decided during its meeting on 11.09.2018 to distribute a gross amount of € 31,782 th. or € 0.10 per share excluding treasury shares, as interim dividend for the fiscal year 2018. The interim dividend of the amount of € 0.10 per share is subject to 15% withholding tax in accordance with Law 4387/2016, i.e. € 0.015 per share. Therefore the net payable amount to the shareholders following the abovementioned withholding tax amounted to € 0.085 per share.
| OPAP S.A. | GREEK ORGANIZATION OF FOOTBALL PROGNOSTICS S.A. Register Number: 46329/06/Β/00/15 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 112, Athinon Ave, 104 42 Athens | General Electronic Commercial Registry-G.Ε.ΜI. Number: 3823201000 SUMMARY FINANCIAL INFORMATION |
|||||||||
| FOR THE PERIOD JANUARY 1 TO JUNE 30, 2018 In accordance with the Decision 4/507/28.4.2009 of the Hellenic Capital Market Commission |
||||||||||
| The following information deriving from the financial report aims at a general presentation of OPAP S.A. and OPAP Group financial status and results. Therefore, it is recommended to the reader, prior to proceeding to any kind of investment decision or transaction, to visit OPAP S.A.'s site, where the financial statements and the legal auditors' review report (the latter whenever required) are posted. |
||||||||||
| Website: Approval date of the financial report from the BoD: |
www.opap.gr 11 September 2018 |
Responsible Supervisory Authority: Ministry of Economy, Development and Tourism Board of Directors: |
Kamil Ziegler, Damian Cope, Spyros Fokas, Pavel Saroch, Michal Houst, | |||||||
| Certified Auditors: | Nikolaos Vouniseas (Registry No SOEL 18701) KPMG Certified Auditors S.A. (Registry No SOEL 114) |
Georgios Melisanidis, Christos Kopelouzos, Pavel Horak, Robert Chvátal, Marco Sala, Igor Rusek, Rudolf Jurcik, Dimitrakis Potamitis |
||||||||
| Review report: | Unqualified | |||||||||
| STATEMENT INFORMATION OF FINANCIAL POSITION (Amounts in thousand euro) |
STATEMENT INFORMATION OF COMPREHENSIVE INCOME | (Amounts in thousand euro except earnings per share) | ||||||||
| GROUP 30.06.2018 |
31.12.2017 | COMPANY 30.06.2018 |
31.12.2017 | 01.01-30.06.2018 | 01.01-30.06.2017 | GROUP 01.04-30.06.2018 |
01.04-30.06.2017 | |||
| ASSETS Intangible assets |
1,135,805 | 1,163,867 | 982,907 | 1,001,442 | Revenue (GGR) Net gaming revenue (NGR) |
737,457 495,459 |
688,460 459,219 |
360,197 242,316 |
329,563 220,182 |
|
| Property, plant & equipment Investment property |
114,265 913 |
109,298 922 |
88,976 913 |
86,994 922 |
Results from operating activities Profit before tax |
111,182 98,778 |
86,112 76,292 |
46,818 40,886 |
30,369 24,778 |
|
| Other non-current assets Inventories |
83,704 7,876 |
82,439 7,920 |
309,162 1,659 |
322,172 1,927 |
Profit for the period (A) -Owners of the Company |
66,379 66,101 |
50,688 49,742 |
26,448 26,231 |
16,891 16,521 |
|
| Trade receivables Other current assets |
104,925 218,658 |
127,829 304,634 |
35,357 65,901 |
54,360 124,167 |
-Non-controlling interests Other comprehensive income, net of tax (B) |
278 (336) |
945 - |
217 (466) |
370 - |
|
| TOTAL ASSETS LIABILITIES & EQUITY |
1,666,145 | 1,796,910 | 1,484,875 | 1,591,984 | Total comprehensive income (A)+(B) | 66,043 | 50,688 | 25,982 | 16,891 | |
| Share capital Other items of equity holders' equity |
95,700 587,761 |
95,700 619,070 |
95,700 590,654 |
95,700 621,323 |
-Owners of the Company -Non-controlling interests |
65,765 278 |
49,742 945 |
25,765 217 |
16,521 370 |
|
| Equity attributable to owners of the Company (a) Non controlling interests (b) |
683,461 33,714 |
714,770 43,397 |
686,354 - |
717,023 | Earnings per share - basic (in € ) - Profit before interest, tax, depreciation |
0.2080 | 0.1565 | 0.0825 | 0.0520 | |
| Total equity (c)=(a)+(b) Provisions / Other non-current liabilities |
717,174 45,035 |
758,167 43,625 |
686,354 54,571 |
717,023 49,351 |
and amortization (EBITDA) | 157,423 | 130,651 | 70,205 | 52,162 | |
| Long term loans Short term loans |
650,883 583 |
513,098 169,171 |
601,214 176 |
467,342 169,171 |
01.01-30.06.2018 | 01.01-30.06.2017 | COMPANY 01.04-30.06.2018 |
01.04-30.06.2017 | ||
| Other current liabilities | 252,470 | 312,849 | 142,560 | 189,097 | Revenue (GGR) | 614,638 | 563,401 | 299,581 | 268,891 | |
| Total liabilities (d) TOTAL LIABILITIES & EQUITY (c)+(d) |
948,971 1,666,145 |
1,038,743 1,796,910 |
798,521 1,484,875 |
874,961 1,591,984 |
Net gaming revenue (NGR) Results from operating activities |
403,851 107,650 |
366,837 82,939 |
197,152 44,972 |
175,209 29,146 |
|
| STATEMENT INFORMATION OF CHANGES IN EQUITY (Amounts in thousand euro) | Profit before tax Profit for the period (A) |
96,907 66,535 |
80,376 58,540 |
39,489 25,878 |
30,401 23,527 |
|||||
| GROUP 30.06.2018 |
30.06.2017 | COMPANY 30.06.2018 |
30.06.2017 | -Owners of the Company Other comprehensive income, net of tax (B) |
66,535 (336) |
58,540 - |
25,878 (466) |
23,527 - |
||
| Equity balance as of January 1st, 2018 and 2017 respectively |
758,168 | 1,072,231 | 717,023 | 1,038,121 | Total comprehensive income (A)+(B) -Owners of the Company |
66,199 66,199 |
58,540 58,540 |
25,412 25,412 |
23,527 23,527 |
|
| Total comprehensive income Dividends paid |
66,043 (98,977) |
50,688 (192,389) |
66,199 (95,345) |
58,540 | Basic and diluted earnings (after tax) per share in € (190,690) Profit before interest, tax, depreciation |
0.2094 | 0.1842 | 0.0814 | 0.0740 | |
| Other movements Share capital increase expenses of subsidiaries |
(1,523) (275) |
- (165) |
(1,523) - |
- | - and amortization (EBITDA) | 141,343 | 116,529 | 62,004 | 45,466 | |
| Αcquisition of treasury shares Share capital return of subsidiaries |
- (6,261) |
(1,585) - |
- - |
(1,585) - |
||||||
| Equity balance as of June 30th, 2018 and 2017 respectively |
717,175 | 928,779 | 686,354 | 904,386 | ||||||
| CASH FLOW STATEMENT INFORMATION (Amounts in thousand euro) | GROUP | COMPANY | ADDITIONAL INFORMATION | |||||||
| Operating activities | 01.01-30.06.2018 | 01.01-30.06.2017 | 01.01-30.06.2018 | 01.01-30.06.2017 | 1. For unaudited tax years, a |
cumulative provision has |
been made |
concerning tax differences |
amounting to € 1,258 |
th. for the |
| Profit before tax Plus / (minus) adjustments for: |
98,778 - |
76,292 - |
96,907 - |
80,376 - |
Group. 2. The assets o f the Company |
and the Group have |
not been pledged. |
|||
| Depreciation & Amortization | 46,242 | 44,538 | 33,693 | 33,590 | 3a. According to the company's and Group for which a negative |
Legal Counsel there outcome of € 29,084 |
are lawsuits from th. and € 29,172 |
third parties concerning th. respectively |
claims against the is estimated and recognized |
Company while the |
| Net finance costs Employee benefit plans |
12,386 809 |
10,099 1,466 |
10,741 740 |
2,542 1,386 |
total sum of these claims reaches 3b. Total cumulative provision |
€ 29,460 th. for the per category is analyzed |
Company and a s follows: |
€ 30,400 th. for the Group. |
||
| Provisions for bad debts Other provisions |
1,827 444 |
18 12,093 |
1,066 444 |
- 12,122 |
i) for legal issues € 29,084 th. for the ii) for uninspected fiscal years iii) for employee benefit plans |
Company and b y tax authorities € 1,258 € 3,480 th. for both |
€ 29,172 th. for the th. for the Group, the Company and € 3,898 |
Group, th. for the Group. |
||
| Foreign exchange differences Share of profit from associates |
18 - |
21 (300) |
2 - |
21 - |
3c. Furthermore, according to the Group which the outcome |
Legal Counsel, third is estimated a s positive and |
party lawsuits consequently, no |
have been filed of a provisions were |
total claim €100,269 required. |
th. for the |
| Results from investing activities (income, expense, profit and loss) |
- | 21 | - | 4 | 4. The number of the employees 1,172 respectively for the Group). |
on 30.06.2018 and |
30.06.2017 for the |
Company were 1,086 |
and 970 respectively |
(1,459 and |
| Other non-cash items Plus / (minus) adjustments for changes |
- | - | 1,377 | 1,377 | 5. The Group's and company's according to IAS 24, are a s |
total inflow, outflow, receivables follows: |
and | payables to related |
companies and |
related parties, |
| in working capital or connected to operating activities: |
||||||||||
| Decrease in inventories Decrease in trade and other receivables |
45 31,068 |
4,277 9,190 |
269 18,973 |
195 8,518 |
||||||
| Decrease in payables (excluding banks) Increase/ (decrease) in taxes due |
(45,018) (27,694) |
(37,805) 9,037 |
(27,663) (23,815) |
(11,040) 9,308 |
GROUP | COMPANY | ||||
| Minus: Interest paid |
(13,889) | (9,534) | (13,114) | (7,712) Inflow | - | (amounts in thousand euro) 15,987 |
||||
| Income tax paid Cash flow from operating activities (a) |
(898) 104,118 |
- 119,413 |
(898) 98,723 |
130,687 | - Outflow Receivables |
1,472 - |
7,299 31,488 |
|||
| Investing activities Proceeds from sales of tangible and intangible assets |
16 | 44 | 16 | Payables - Transactions and salaries of executive and administration members |
269 6,398 |
8,481 4,745 |
||||
| Loans received from third parties Share capital increase of subsidiaries |
3,384 - |
174 - |
3,000 19,018 |
(15,000) | - Liabilities from executive and administration members | 1,109 | 906 | |||
| Purchase of intangible assets Purchase of property, plant and equipment |
(9,339) (13,814) |
(22,901) (13,555) |
(9,065) (8,083) |
(1,914) (13,387) |
||||||
| Dividends received Interest received |
- 887 |
- 1,244 |
836 454 |
500 641 |
From the above transactions, the consolidated financial statements |
transactions and of the Group. |
balances with |
the subsidiaries |
have been removed |
from the |
| Cash flow from/(used in) investing activities (b) Financing activities |
(18,866) | (34,993) | 6,177 | (29,160) | 6. Τh e Company's share value of 0.30 euros each. |
capital amounts to 95,700,000.0 |
0 euro, divided |
into 319,000,000 |
shares with voting |
rights, par |
| Proceeds from loans Payments of loans |
260,477 (290,611) |
200,000 (30,953) |
250,005 (290,500) |
200,000 (20,953) |
7a. There was no modification 8.There were no changes |
in the method of consolidation in the structure of the Group |
compared a s a t 30.06.2018. |
to the year ended | on 31.12.2017. | |
| Borrowing costs Αcquisition of treasury shares |
(1,250) - |
(3,726) (1,585) |
(1,250) - |
(3,726) (1,585) |
9. The accounting principles applied for preparing the Interpretations applicable from |
applied in preparing financial statements for the 01.01.2018. |
these interim fiscal year 2017 |
condensed financial statements considering |
are the the changes |
same as those to Standards and |
| Return of share capital of subsidiary to non controlling interests |
(6,261) | - | - | - | 10. The fixed assets purchases 11. There has not been any cease |
concerning the period of operations in any |
01.01-30.06.2018 of the Group's |
reached € 17,148 th. (€ segments or companies. |
23,153 th. for the |
Group). |
| Share capital increase expenses of subsidiaries Dividends paid |
(275) (113,609) |
(165) (191,374) |
- (109,978) |
- (190,525) |
12. The amounts are presented 13. Any differences in sums are |
in thousand euro a s due to roundings. |
in the six month |
financialreport. | ||
| Cash flow used in financing activities (c) Net increase / (decrease) in cash |
(151,529) | (27,804) | (151,723) | (16,790) | 14. The Eighteenth 25.0 4.2018 a t its headquarters, approved |
(18th) Annual Ordinary Shareholders the distribution |
General Meeting of earnings |
of OPAP and decided upon |
S.A. that took place on the distribution of a |
Wednesday, total gross |
| and cash equivalents (a)+(b)+(c) Cash and cash equivalents at the beginning of the period |
(66,277) 246,102 |
56,615 273,523 |
(46,824) 94,270 |
84,737 65,433 |
dividend of 0.40 euro per share had already been distributed |
prior to the tax withhold to the shareholders |
for the a s interim dividend |
fiscal year 2017. Since the pursuant to the |
amount of 0.10 euro respective |
per share decision of the |
| Cash and cash equivalents at the end of the period | 179,825 | 330,139 | 47,447 | 150,170 | Company's Board of Directors, the the relevant tax withhold. Eligible |
remaining dividend to receive the dividend |
for the were OPAP's |
fiscal year 2017 amounted registered shareholders |
to 0.30 euro per share on |
prior to Wednesday, 08.05.2018 |
| (record-date). 15. The six month financial report of 2018 |
was approved |
with the 11.09.2018 |
BoD resolution. |
|||||||
| Athens, 11 September 2018 |
||||||||||
| Chairman of the Board | Chief Executive Officer | Member of the BoD and |
Accounting and | |||||||
| Chief Financial Officer | Consolidation Director | |||||||||
| Kamil Ziegler Passport No. 40412133 |
Damian Cope Passport No. 801407564 |
Michal Houst Passport No. 39893691 | Petros Xarchakos ID. Νo ΑΚ 161998 |
|||||||
In accordance with the provisions of paragraph 4.1.2 of the Athens Exchange Stock Market regulation, the decision no. 25/17.07.2008 of the Board of Directors of Athens Stock Exchange and the decision no. 8/754/14.04.2016 of the Board of Directors of Hellenic Capital Markets Commission, it is hereby announced that from the issuance of the Common Bond Loan of two hundred million euros (€200,000 th.) with the issuance of the 200,000 bearer bonds with offer price of €1,000 each, that was implemented according to the decision of the meeting of the Company's Board of Directors dated 28.02.2017 and the approval of the content of the Prospectus from the Hellenic Capital Market Commission dated 08.03.2017, a total net amount of two hundred million euros (€200,000 th.) was raised. The cost of the issuance amounted to €3,726 th. and it was covered in total from own other funds of the Company.
Furthermore, the 200,000 bearer bonds commenced trading in the fixed income securities category of the regulated market of Athens Stock Exchange on 22.03.2017.
The table below presents the specific use of the raised funds per category of use/investment, the timetable of the utilization of the funds raised as well as the use of raised funds until 30.06.2018:
| (amounts in thousands of euro) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Amount of Raised Funds that utilized |
Amount of Raised | Remaining amount to be utilized |
||||||||
| Investment sector | 2017-2019 | Funds that utilized during the period during the period 01.01.2018- 21.03.2017-31.12.2017 30.06.2018 |
2018 | 2019 | ||||||
| IT systems and Agencies equipment | 75,871 | 7,329 | 33,971 | 19,571 | 15,000 | |||||
| VLTs | 25,190 | 6,469 | 7,590 | 8,131 | 3,000 | |||||
| SSBTs & Virtual games | 16,539 | 4,950 | 6,501 | 3,088 | 2,000 | |||||
| Funding needs in Working Capital | 82,400 | - | 82,400 | - | - | |||||
| 200,000 | 18,748 | 130,462 | 30,790 | 20,000 |
Athens, 11 September 2018
Chairman Chief Executive Officer Board Member and Chief Financial Officer
Kamil Ziegler Damian Cope Michal Houst
To the Board of Directors of Greek Organization of Football Prognostics A.E.
According to the engagement letter dated 6 September 2018, we were appointed by the Board of Directors of Greek Organization of Football Prognostics A.E. (the "Company") to perform the agreed upon procedures enumerated below with respect to the "Report on the Use of Funds Raised from the issuance of a Bond Loan amounting to EUR 200 000 000" (hereafter the "Report") issued in March 2017. The Management is responsible for the preparation of the above mentioned Report in accordance with the requirements of the current regulatory framework of the Athens Stock Exchange and the Hellenic Capital Market Commission and in accordance with the Prospectus dated 8 March 2017.
Our engagement was undertaken in accordance with the International Standard on Related Services (4400) applicable to "Engagements to perform Agreed – Upon procedures regarding Financial Information". Our responsibility is the performance of the agreed upon procedures enumerated below and to report our findings.
Our procedures are summarized as follows:
We report our findings below:
The proceeds of the bond loan from 1 January 2018 up to 30 June 2018 were allocated according to their intended use, in accordance with paragraph 4.1.1 of the Prospectus dated 8 March 2017, as amended by the Decision of Board of Directors of the Company which was held on 25.1.2018, by examining documents on a sample basis that support the relevant accounting entries.
Because the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engagements, we do not express any other assurance except as discussed above.
Had we performed additional procedures or had we performed an audit or review in accordance with International Standards on Auditing or International Standards on Review Engagements, other matters might have come to our attention that would have been reported to you.
This report is addressed only to the Board of Directors of Greek Organization of Football Prognostics A.E. in the context of its obligations to the current regulatory framework of the Athens Stock Exchange and the Hellenic Capital Market Commission.
Consequently, this report should not be used for other purpose as it is limited to what is referred above and does not extend to the six-month financial report prepared by the Company for the period ended 30 June 2018, for which we issued a Review Report dated 11 September 2018.
Athens, 11 September 2018
Nikolaos Vouniseas
Certified Auditor Accountant
AM SOEL 18701
KPMG Certified Auditors ΑΕ
3 Stratigou Tombra Street
Aghia Paraskevi
AM SOEL 114
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