Lottery system provider Rexlot Holdings has reported a decline in profit for the six months ended June 30, 2016, due to a “challenging operating environment” and a slowdown in the economy.
In a filing to the Hong Kong Stock Exchange, the lottery company said profit before taxation declined 73 percent to approximately HK$90.8 million in 16H1, down from HK$342.2 million in prior-year period.
Group revenue decreased 20 percent over the same period, from HK$848.8 million to HK$675.3 million in 2015.
“Whilst the Group delivered better results during the first half of 2015, the period under review presented a challenging operating environment. The PRC economy experienced a slowdown in growth. There was a general decline in various sectors of the Chinese lottery market and the internet lottery distribution channel remained suspended,” said the company in its filing.
Rexlot also said cost of sales / services and selling and distribution expenses including salary, marketing cost and other operating costs in the PRC increased substantially during the period due to business restructuring and keen market competition.
China’s lottery market on the other hand registered total lottery sales of RMB 194.3 billion in the first six months of 2016, representing an increase of 4 percent as compared to the same period in 2015.