Credit rating agency Fitch Ratings has revealed that, despite a 40% drop in gross sales of traditional lottery during the pandemic, the Lotería de Medellín has managed to keep its finances stable in the first half of 2020.
According to Fitch, the results have been achieved due to “the redistribution of prizes that the lottery implemented to reduce business risk, the high proportion of variable expenses and the maintenance of robust technical reserves”, as well as the “temporary flexibility of some normative dispositions, that would help reaching the regulatory risk during the sanitary crisis.”
The data that the Colombian state lottery sent to the Consolidator of Finance and Public Information (CHIP) shows that gross sales totalled $9.3m in H1, approximately $6.6m less than in the same period in 2019.
In addition, the Medellín lottery maintained enough cash flow and levels of liquidity of $29.2m, which according to Fitch, is “higher than current liabilities and the technical reserve for prize payments,” worth around $18.6m.
The credit rating agency said that fixed costs, mostly related to administrative expenses, represent less than 10% of total expenses.
“Thus, while the agency expects the 2020 operating results to be affected by the health crisis, the impact is likely to be softer than what we’ve seen around sales.”