Megabet returns to profit

After reporting massive losses during the last years, finally Megabet Public Co. Ltd. (MEGA) managed to report a profit, which although tiny compared to the huge losses reported previously, still, it indicates that a turnaround may at last be in sight.

MEGA reported net profit of CYP 17.378 for the financial period ending July 31, 2006 compared to CYP 962.939 losses a year ago in 2005.

Turnover fell sharply from CYP 16.68 mln in 2005 to only CYP 3.55 mln for 2006, but gross profit were stable at CYP 1.29 mln in 2006 compared to CYP 1.28 mln in 2005.

Megabet said that the reason for the sharp decline in turnover is because of its decision to stop accepting bets from its overseas operations, and instead it now acts as agents for Asian bookmakers, which generated CYP 1.4 mln in commission income, booked as other income, up sharply from CYP 368.734 a year ago.

The Cyprus operations however, fell the competitive squeeze from the illegal operators as total turnover from local bets fell by 21.7% YoY to CYP 3.55 mln compared to CYP 4.54 mln a year ago.

Operating profits thus jumped to CYP 429.309 compared to operating losses of CYP 517.197, but following the reduction of depreciation charge of CYP 340k and finance costs of CYP 64k, pretax profit amounted to CYP 25k while net profit attributable to shareholders after accounting for minority interest amounted to CYP 17.378.

EPS were 0.01 cent compared to a loss of 1.44 cent a year ago.

The issue of new shares helped boost issued capital to CYP 3.33 mln (2005: CYP 1.7 mln) and the share premium account was credit with CYP 233k, which coupled with the favourable performance, helped boost total shareholders funds to CYP 3.36 mln from CYP 1.36 mln a year ago.