The Company accepted bets (Amounts Staked) in the amount of EUR 209 million in the first half of 2011, a 9.1% increase yoy. Financial results of the Fortuna, the leading Central European fixed-odds betting operator present on the markets of Poland, the Czech Republic, Slovakia and Hungary, confirmed continuing market growth in sports betting in the Central Europe.

Key driver of the growth was on-line betting in the Czech Republic and Slovakia. Despite the absence of big sports events for example such as the Olympic Games or the FIFA World Cup last year, Fortuna performed very well and has beaten its 2010 record figures.

„In the first half of 2011 our earnings continued to grow, primarily supported by a strong performance of online sports betting. While our total volumes of accepted bets were impacted by a lack of attractive sports events, we managed to grow our business in all revenue parameters. Our excellent results follow our chosen strategy of two main distribution channels, where retail shops serve not just as sales points but also provide online betting support.

During the first half of the year, we have been able to report additionally some revenues from sale of the instant scratch tickets which are part of the new Czech lottery business. For the rest of the year, we will fully focus on meeting our targets set in the lottery project, which is our key growth initiative as well as delivering planned results in the traditional sports betting segment. “ said Jiří Bunda.

In the first half of 2011, Gross Win came to EUR 47.9 million, an increase of 5.5% compared with the same period in 2010. Gross Win from on-line betting in the first half of 2011 increased to EUR 14.6 million, a substantial gain of 39.6% over the same period in 2010. Gross Win from retail betting in the first half of 2011 amounted to EUR 32.8 million, 6.0% less than in the previous year. The decline in retail betting was driven by the weaker second quarter mainly due to the FIFA World Cup absence. Gross Win from lottery (sale of the scratch tickets from half May) amounted to EUR 426 thousands in the first half of 2011.

In the first half of 2011, the Company recorded total revenues in the amount of EUR 41.9 million, 6.5 % more than in the previous year.

EBITDA of Fortuna increased in the first half of 2011 by 2.4% yoy to EUR 11.9 million. EBITDA from sports betting (excluding lottery) equalled EUR 12.9 million in the first half of 2011, by 10.7% more than in the same period last year. Despite lack of highly attractive sports events such, Fortuna´s strict operating costs management and control of margins led to a high EBITDA figure, particularly in the sports betting segment. Total consolidated EBITDA was impacted by start-up lottery costs as the EBITDA from lottery on stand-alone basis reached a loss of EUR 962 thousands.

Fortuna successfully managed to reduce its financing costs in the first half of 2011 as a result of favourable refinancing in 1H 2010 and repayment of some debts last year. Net finance costs reached EUR 272 thousand and significantly decreased by 84.6% yoy.

Fortunareached consolidated net profit of EUR 8.6 million in the first half of 2011, 19.3% more than in the same period of the previous year. This excellent result was achieved thanks to higher volumes of accepted bets, prudent operating costs management and significantly lower finance costs.

Fortuna is further committed to its recently announced dividend policy and anticipates in the upcoming years the dividend payout ratio in the range of 70 - 100% of the net profit from the continuing operations.

Czech Republic – Sports Betting

The sports betting in the Czech Republic generated 52.9% of total amounts staked for the Company in the first half of 2011, a modest increase from 52.4% in the first half of 2010. Total Amounts Staked came to EUR 110.7 million, 10.2% more than in the first half of 2010. Gross Win in the Czech Republic sports betting amounted to EUR 21.9 million in the first half of 2011, 4.3% more than in the previous year. This growth was driven primarily by the on-line expansion; Gross Win from the on-line segment climbed by 36.7% yoy and amounted to EUR 7.9 million. On the contrary, Gross Win from retail betting in the Czech Republic declined 8.1% yoy and totalled EUR 13.9 million.

Czech Republic – Lottery

The newly reported revenue stream Czech Republic Lottery included in the first half of 2011 only results from the sale of the scratch tickets and cannot provide y-o-y comparison. Total Amounts Staked came to EUR 776 thousand. Gross Win in the Czech Republic lottery amounted to EUR 426 thousand in the first half of 2011.

Slovakia

The share of Slovakia with regards to total amounts staked in the first half of 2011 came to 33.6%, in comparison with the 32% share recorded in the first half of 2010. Total amounts staked came to EUR 70.3 million, 14.6% more than in the first half of 2010. Gross Win in Slovakia amounted to EUR 16.1 million in the first half of 2011, 10.9% more than in the same period of the previous year. Gross Win from on-line betting was EUR 6.6 million, 41.5% more than in the same period of the previous year. Gross Win from retail betting in Slovakia went down by 3.4% yoy and totalled EUR 9.6 million.

Poland

Poland accounted for a 12% share of total amounts staked in the first half of 2011, compared with a 15.5% share in the same period of 2010. Total amounts staked in Poland came to EUR 25.1 million, 15.4% less than in 2010. Since the implementation of 12% tax rate on amounts staked in 2010 and the impossibility to offer some products, for example number games, volumes of accepted bets have reduced in Poland. Gross Win from betting in Poland went down to EUR 9.3 million in the first half of 2011, a decrease of 5.3% yoy. Gross profit from accepted bets in Poland reached EUR 6.3 mil. which is 0.7% more when compared with the same period in 2010. Gross profit margin was 25.2% in the first half of this year which represents a 4% yoy increase.

Malta

In the first half of 2011, total amounts staked came to EUR 2.2 million and Gross win from betting was EUR 97 thousand.

Lottery

On 18 July 2011, Fortuna launched new Loto lottery in the Czech Republic. After more than 50 years of the incumbent monopoly, the first new fully-fledged Loto lottery has been brought to the people by Fortuna. Approximately every fourth ticket will be a winner; the jackpot worth tens of millions CZK can be won with a single column bet costing just CZK 20. The Fortuna Lottery also brings back the original purpose of the lottery and decided to support good cause projects for disadvantaged children. Among the first partners are Centrum Paraple, Fond ohrožených dětí and Konto Bariéry. 

Loto is a simple and attractive game and the rollover jackpot will start at CZK 10 million and is anticipated to be paid out several times a year. Overall, nine prizes will be split; players know in advance the amount they can win (except the jackpot as these are set and not divided among a large number of potential winners. The first lottery draw took place on 20^th July and thereafter twice a week each Wednesday and Saturday. The lottery draw is broadcasted by TV Nova in the main broadcasting time at around 8 PM.

A key to Lotto’s success is a network of high-quality retail outlets. Fortuna currently operates almost 1,000 retail outlets that will increase to 2,000 by the end of this year. Fortuna´s terminals also offer mobile phone top-ups for customers of Telefónica O2 Czech Republic, T-mobile ČR and Vodafone CZ.

According to Company´s estimates, Loto has already gained a 13% market share in the current lottery market in the Czech Republic. Fortuna´s objective remains reaching a 30% market share within next three years.

On-line Betting in Poland

On May 26th 2011, the Polish Sejm amended the gambling law to allow online sports betting for locally licensed companies. Moreover the new regulations strengthen the Polish Customs Service's authority in controlling illegal activities of online gamblers, including monitoring and suspension of money transfer. The new regulations came into force on July 14th 2011.

Immediately after the new regulations have been introduced, the Polish subsidiary of Fortuna Entertainment Group – Fortuna zakłady bukmacherskie – submitted to the Ministry of Finance a request for permission to provide its clients in Poland with on-line betting. The Ministry of Finance is expected to approve the within next couple of months.

Thanks to the experience from the Czech Republic and Slovakia markets, where Fortuna Entertainment Group already successfully runs both betting spots and on-line betting, the Company is already now ready to provide on-line offer in Poland immediately after obtaining the consent of the Minister of Finance. Fortuna is the only betting operator in the Polish market with such a know-how which will enable the launch of the online betting immediately after the Polish law allows it.