SVL has Strong Q3 Performance, Bets on Resilience Post Melissa

  • Supreme Ventures Limited (SVL) posted a 48.7% increase in shareholder profits to $555.03Mn for Q3 2025. The growth was primarily driven by an expansion in total gaming income, which outpaced direct operating expenses.
  • Total gaming income grew by 9% to $13.96Bn, supported by an 18.6% rise in income from fixed-odd wagering games and a 3.6% increase in revenue from non-fixed-odd wagering games, horse racing, and pin codes.
  • Direct costs grew marginally slower, up 8.1% to J$10.79Bn. Consequently, gross profits improved by 11.7% to $3.16Bn and gross margins widened from 34.3% to 37.0%, indicating the company is better managing input costs as it grows its revenues.
  • The growth in gross profits also outpaced operating expenses (+4.3%), resulting in a 32.8% improvement in operating profit relative to Q3 2024. Of note, selling, general, and administrative expenses declined by 8.7% due to the company’s ongoing cost optimisation strategies. Consequently, operating margins ended the quarter at 11.5% from 8.9%. Lastly, finance costs (+13.13% to $0.22Bn) grew more slowly than operating profits, which also supported higher shareholder profits and a widening of net margins, from 2.9% to 4.0%.
  • SVL’s Q3 performance helped to offset a 41.56% slip in Q1 20251. As a result, 9M 2025 earnings are up 9.1% to $1.85Bn. Q1’s earnings decline was largely driven by a disproportionate spike in operating expenses despite higher revenues.
  • Looking ahead, SVL could face significant operating pressures due to the impact of Hurricane Melissa, which ravaged the Western Section of the island. In 2024, Hurricane Beryl and Tropical Storm Rafael had a notable one-off impact on third and fourth-quarter revenues, with the company estimating a $1.00Bn loss in gross ticket sales due to damage sustained by retail networks in Clarendon, Manchester, St. Elizabeth, and Westmoreland. Due to the wider scale of damage relative to Beryl, along with the projected longer downtime of electricity and lottery terminals in the affected parishes, SVL could face losses in excess of the $1.00Bn this time around.
  • The company, however, noted that it has, to date, restored 60% of its lottery terminals after Hurricane Melissa forced a temporary shutdown of its operations and that the remaining capital from its recently concluded $5Bn debt issuance has placed it in a much better position to withstand the disruption.
  • At the market close on Wednesday, November 5, 2025, SVL’s stock price was J$17.59, down 28.9% since the start of the year. At this price, SVL trades at a P/E of 23.8x, which is above 13.05 for the Main Market average.

________________________

1Q1’s earnings decline was largely driven by a disproportionate spike in operating expenses despite higher revenues.