AGTech reveals 32.3% revenue decrease in Q1 financials

Chinese lottery, games and entertainment technology company AGTech Holdings Limited,has published its Q1 results for the three months ended March 31, 2020 revealing a revenue decrease of roughly 32.3% when compared to Q1 2019.

The revenue recorded by the group totalled HK$13.7m with contributions to this mainly derived from lottery hardware, lottery games and systems, provision of lottery distribution and ancillary services, games and entertainment business in China. All recorded a decrease in performance.

Falls in sales of lottery hardware of approximately HK$3.4m, a drop of HK$1.5m in revenue from the provision of lottery distribution and ancillary services, and a decline of circa HK$1.2m from the lottery games and systems are cited as the primary causes of the organisation’s overall Q1 revenue slowdown. 

A statement published by the group read: “AGTech will continue to leverage on and explore opportunities for collaboration with Alibaba Group’s retail ecosystem to enhance on lottery distribution models where appropriate. 

“The group also anticipates a gradual rollout of our SaaS (Software-as-a-Service) platform aiming to serve and benefit users from all sectors within the lottery supply chain. Our platform is expected to be well equipped for applications within the Alibaba digital ecosystem, in addition to any potential change in distribution channels other than the current retail model.”

According to China’s Ministry of Finance, the Q1 period saw the lottery market record sales of approximately RMB37.7bn, marking an approximate 64.5% decrease when compared to the corresponding period in 2019. 

In this figure, Welfare Lottery accounted for roughly RMB18.06bn (-63.2% when compared to Q1 2019), and the Sports Lottery reported sales of approximately RMB19.65bn (-65.7% when compared to Q1 2019).

The overall drop in sales has been mainly attributed to the impact felt as a result of the COVID-19 outbreak as business hours of lottery sales outlets were significantly reduced. 

AGTech concludeD: “The Group is closely monitoring the latest development and impact of the COVID-19. AGTech’s Hardware division primarily supplies the Sports Lottery and the Welfare Lottery and has hardware deployed in multiple provinces, cities, municipalities and autonomous regions across China. 

“The Group will continue to pursue tenders to supply to the lottery and other hardware market and bid for new contracts after resumption of tenders post COVID-19 delays.”