Ladies and gentlemen, thank you for standing by. I am Mina, your Chorus Call operator. Welcome, and thank you for joining the INTRALOT conference call and live webcast to present and discuss the first half, 2023 financial results. All participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question-and-answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Chrysostomos Sfatos, Deputy Group CEO of INTRALOT. Mr. Sfatos, you may now proceed.
Welcome to the earnings call for the first half of 2023. I will pass the mic to the Group CFO, Mr. Andreas Chrysos, for his statements.
Good afternoon, ladies and gentlemen. In the first half of 2023, INTRALOT continued to grow and presented healthy cash flows, supported by strong operational metrics following the same trend of the last two years. Strong EBITDA growth for the period, as well as higher last twelve months EBITDA of EUR 130.6 million, compared against EUR 123 million at the end of 2022, indicates the continuous improvement on the operational front. In addition to this, the strategic choice to exit from markets with lower margins and engage further in higher profit margin contracts and markets is marked by the growing EBITDA margin, which reached 35.8% in the first half of 2023, which was an increase of nine percentage points year-over-year.
Improved credit profile with lower leverage ratios and continuous deleveraging are the targets on the financing front, in which INTRALOT has already shown substantial progress in the last two years, and we will continue the same way in the next short-term period. Yesterday, we announced during our shareholders' meeting the plan for a share capital increase by a rights issue that will strongly contribute to the company's deleveraging efforts, expecting to bring the net leverage ratio below 2.8x. This will allow us to free up cash flows, accompanied also by the strong technological capabilities, which will be directed towards addressing significant opportunities that we see ahead in the US market and in other areas of the world we are focusing on.
The first half of 2023 key takeaways are the strong EBITDA growth of 14% year-over-year, positive earnings after tax, a further decrease in leverage ratios, as well as strong operational cash flow generation, which was higher by 20% year-over-year. We are now moving to the six months of 2023 financials presentation that you have in front of you. On page 5, we see the results of our licensed operation, which have contracted by around 66% or EUR 43.2 million, due to the license expiration in Malta in July 2022, affecting negatively the first half of 2023 revenues. In Argentina, although in local currency terms, there was a substantial increase year-over-year, headwinds and the effects resulted to a slightly lower performance in euro terms.
Turning to page 6, we will notice a material improvement in the performance of our technology contracts, which have been improved by around 5%. Key takeaways in this activity line are, first of all, the high revenues in the US for the six-month period, organically driven by the growth in the numerical and instant games. And secondly, a better performance in our business in Croatia. Finally, turning to page 7, we see a significantly improved performance of our management contracts, which have improved by EUR 8 million, or 36.7%, primarily driven by the strong momentum of our online business in Turkey with our company, Bilyoner, and the growth of the respective sports betting segment by more than 2 times year-over-year in the country. Strong performance has been partially mitigated by the headwinds in the local currency.
And now moving to page number 8, we see the overall profit and loss statement performance metrics for the six months versus a year ago. Takeaways on the operational front are the following: the lower performance. First of all, the lower performance in the revenue line year-over-year, analyzed in detail in the previous slides, but primarily affected by the license expiration in Malta. Secondly, the gross profit line, as mentioned already, was affected strongly by the shift of the business to more profitable lines of activities, and therefore it was better by 12% or EUR 6.3 million, accompanied by a better margin of 8.5 percentage points versus the respective period in 2022. Thirdly, the operating line was better by 5.2%.
or EUR 2.6 million, primarily due to the ability of the group to adjust its cost base very quickly following the license expiration in Malta. If excluding this effect, the OPEX line was pretty stable year-over-year. Therefore, the increase of the top line was directed down to the EBITDA, which finally stood at EUR 62.8 million for the period, 14% better compared to the respective period of last year. In line with the gross profit margin, and EBITDA margin over sales was also higher by 8.9 percentage points versus last year.
As a result of all the above metrics, but also due to the lower depreciation and amortization result of EUR 4.6 million, EBT was strongly positive and doubled if compared to the previous year, standing at EUR 16.3 million versus EUR 8 million in 2022. While the bottom line results continuing in positive trajectory for one more reporting period, indicating the improvement on the operational as well as on the financing front. A major highlight of the P&L is also the improvement of the last 12 months metrics, with the EBITDA reaching EUR 130 million trajectory and EBT and earnings lines being also strongly positive, which is one more indication of the positive outlook of our performance. Turning to page 9. Upper graphs have already been analyzed in detail in the previous slides.
Focusing on the bottom left of the slide, we see the operating cash flow standing at EUR 50 million for the first half of 2023, which was higher by 20% compared to the respective period of 2022, which was a direct effect of the high EBITDA. Net CapEx was higher by EUR 3.6 million versus a year ago, mainly due to the higher CapEx needs in the US On the bottom right of the slide, we see the implication of the continuously improved performance on the financing as well as on the operating front, with a net debt and net debt to EBITDA ratio standing at EUR 480 million and 3.7 times, respectively, at the end of June 2023.
Considerably improved not only versus a year ago, but also compared to the respective performance 6 year ago metrics at the end of 2022. 6 months ago, excuse me. Turning to page number 10, we see the net debt movement bridge for the 6 months from December 2022 through June 2023, indicating a strong free cash flow generation of around EUR 21 million and an overall improved net debt by around EUR 10 million in the 6-month period. This metric was also positively affected by a gross debt movement of EUR 11 million. That includes the capital payments towards the term loan in the US and the favorable effect from the FX differences for our US dollar-denominated debt. Lastly, on page number 11, we see the contributions per region in our revenues and EBITDA.
The key takeaway from this slide is that there is a balanced contribution on basic operational debt metrics between North America and the rest of the world, since around 46% of the revenues and 54% of our EBITDA come from North America, with the rest coming from the rest areas of the world. At this stage, the presentation of the results for the first half of 2023 is finished, and the INTRALOT executive team is at your disposal for any questions you may have. Thank you.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star, followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking a question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. As a reminder, if you would like to ask a question, please press star and one on your telephone. The first question is from the line of Scott Lino with PSquared Asset Management. Please go ahead.
Hi, thank you very much for the question. Two questions from my end, please. Could you provide us a kind of an update on how you think about the refinancing, particularly what kind of timing you have in mind? And also, if you could, kind of repeat the comments you made at your opening statements. Did I understand correctly, you're, you're doing a Rights Issue that gets leveraged down to two turns? If you just could, repeat that and, give a bit more color around it. Thank you.
Yes. Thank you very much. Indeed, we announced yesterday in our shareholders' meeting a share capital increase coming up, basically, the shareholders authorized the board of directors to present the terms of such a share capital increase via rights issues, the same way we did rights issues last year. So this, the timeframe for this, to announce the terms and prospectus is by the end of September. And we also plan to do the refinancing, so part of these proceeds will be used for the refinancing. And our goal is to take the leverage ratio below three, and we believe it will be below the area of 2.8 according to our plans. But the details of the rights issue will be announced by the end of September.
Also, we are in discussions with banks for issuing a retail bond here in Greece, and also getting a syndicated loan with a group of banks. So the refinancing of the EUR 356 million outstanding 2024 notes, which expire in September 15, 2024. So, basically, in a year from now, they will be refinanced by means of these three moves. The sum of the funds that will be raised from the rights issue, a retail bond and a syndicated loan. And we are in discussions with the banks, of course, and soon we will be announcing some more details about this. So the timeframe for having all the funds to refinance the notes is in the next couple of months, definitely before the end of, I mean, the plan is to do this before the end of 2023.
Perfect. That is very clear. Thank you.
Once again, to register for a question, please press star and one on your telephone. As a final reminder, to register for a question, please press star and one on your telephone. The next question is from the line of Konstantinos Karlis with Euroxx Securities. Please go ahead.
Yeah, good evening there. Could you provide us a guidance for the full year, 2023, turnover? And, where do you expect the total, the net CapEx for this financial year to, as a full, number? These two questions, please.
Yeah, we normally do not provide guidance. We are excited about the strong results that we have presented for the first six months. Actually, from what we know, the Q3 is stronger than the Q2, which was weaker than the Q1, but this is normal. The Q1 had two jackpots, jackpots in the United States, which contributed significantly in the Q1 results, which didn't happen in the Q2. Usually, we have two such events per year. We had two strong jackpots in the months of July and August, which is going to contribute significantly in the second half results. We also have announced that we have some income coming from our new Taiwan contract, which will be a very strong one-time income coming in the Q4.
We see continuously strong performance in our Turkish operations, which will also be probably more heavily loaded in the Q4. With all this considered, we stand by our optimism for completing this year with much stronger performance than last year, and the six-month results are indicative to that end. Giving you specific guidance, I would refrain at this point.
Okay, thank you very much.
The next question is from the line of Francesco Barbato with JP Morgan. Please go ahead.
Hi, can you hear me?
Yes, you are heard on the conference. Please go ahead.
Hi, it's Gemma Pavlu from J.P. Morgan. I just wanted to go to maybe come back on the refinancing question and just want to make sure I heard it correctly. So are you, did you say that you're already in discussion with banks, and you're possibly looking at a retail bond? Just curious if you're looking at a euro bond. And then my second question along the lines of refinancing, are you planning to do anything in the US at all? And by that, I mean, when I look at the refinancing that you did last year, that was through for the loan, the dollar note, and the terms there were quite attractive. So I was just curious to know if you're planning anything at all in terms of US when you're thinking about refinancing. Thank you.
... Let me start from the second question. Right now, the US market is not as attractive as it was last year, and so we're continuing to service that loan that we had last year. We're not looking to refinance that loan right now. Our focus is on the 2024 notes that expire in 12 months from now. As I said, I mean, you're asking specifically about the bond part, and this, the plan is to issue a retail bond here in Greece because the rates are much more attractive here. But the tranches will be smaller than what you usually see in the international high yield market. That's why we have three different sources of financing.
That's very clear. Thank you for confirming.
Once again, to register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.
Thank you very much for participating in this earnings call. As I said, we will be making more announcements on the refinancing front and on the share capital increase front later in September. Thank you very much, and look forward to the next one.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a good afternoon.