Lottery in the Philippines: Pacific Online Systems revenue down amid transition to new system

Revenue was down 17 per cent in year-on-year terms.

The Philippines.- Pacific Online Systems Corporation (POSC) has shared its financial results for the first nine months of the year. It has reported net revenue of PHP3.8m (US$64,250), down 17 per cent from PHP228.2m (US$3.89m) posted a year ago.

The company attributed the decline to the transition from the legacy system to the nationwide lottery system under its joint operation, PinoyLotto Technologies Corp. Net income was down by 98.3 per cent in year-on-year terms from PHP228.2m to PHP3.8m (US$3.89m)

The lottery firm reported that costs and expenses increased by 33 per cent to PHP360.5m (US$6.15m) due to the transition. Depreciation expenses rose to PHP114.5m (US$1.95m) due to the depreciation of the new equipment and higher costs for communications, repairs and maintenance for the Philippine Lottery System (PLS).

POSC’s assets decreased 6 per cent year-on-year to PHP1.78bn (US$30.33m), due to a 56 per cent decline in investments held for trading due to the sale of its DigiPlus Interactive shares, while trade and other receivables fell 16 per cent to PHP238.6m (US$4.06m). The company’s cash and cash equivalents rose by 68 per cent in year-on-year terms to PHP577.3m (US$9.86m) mainly due to the sale of Premium Leisure Corp. (PLC) shares to Belle Corp and offset in part by the payment of dividends to shareholders during the period.

Belle Corp concluded its tender offer for the voluntary delisting of PLC from the Philippine Stock Exchange (PSE) in May. It now holds a 99.55 per cent stake in the subsidiary. The tender offer, which closed on May 9, saw Belle Corp purchase slightly over 6.17bn shares at PHP0.85 each, amounting to nearly PHP5.25bn (US$90.7m). PLC was delisted on July 9.

See also: Belle Corp gaming segment revenue down 24% in H1

In June, POSC was awarded a five-year, PHP4.08bn (US$69.81m) contract with the PCSO. The company was the only bidder for the web-based application, e-lotto, which is a digital adaptation of conventional lottery games, providing players with the ease, security, and transparency of electronic wagering.

In August, the Supreme Court ordered the Philippine Amusement and Gaming Corporation (PAGCOR) and the PCSO to allocate a portion of income to support the Philippine Sports Commission as mandated by the Republic Act 6847, also known as The Philippine Sports Commission Act.