Global gaming and lottery supplier International Game Technology Plc (IGT) reported total revenue for the third quarter 2016 was US$1.27 billion, up by 5 percent in year-on-year terms. The firm stated in a Monday release that the revenue increase was due to “strong lottery growth and higher gaming product sales”.
IGT said that during the period it had benefited from a “large systems sale” in Asia. The firm’s management confirmed in a conference call following the results announcement that the system had been deployed at casino resort Wynn Palace, a property which opened in Macau’s Cotai district on August 22.
IGT’s revenue from international gaming product sales – a segment that excludes sales to North America and Italy – rose 12 percent year-on-year on a constant currency basis. The firm said the performance was “supported by the 3,742 gaming machines shipped at higher average unit prices during the third quarter of 2016 compared to 3,296 units in the prior-year period.”
IGT’s international gaming service revenue was US$43 million compared to US$50 million in the third quarter of 2015, “mainly due to the exit of certain interactive operations”. At constant currency, international terminal service revenue grew 3 percent over the prior year and the installed base rose 500 units to 10,268.
The firm posted a net loss of US$2 million for the three months ended September 30, “reflecting the impact of US$21 million in primarily non-cash foreign exchange losses”. On an adjusted basis, net income attributable to IGT rose 6 percent year-on-year to US$90 million, the firm said.
Adjusted earnings before interest, taxation, depreciation and amortisation were up 4 percent to US$430 million.
IGT declared on Monday a cash dividend of US$0.20 per ordinary share. The dividend is payable on December 19 to all shareholders of record as of the close of business on December 5.
“Strong lottery performance across the world, a larger global installed base, and increased sales of gaming machines drove another quarter of solid revenue and profit expansion,” IGT’s chief executive, Marco Sala, said in a statement included in Monday’s release.
IGT’s net debt was US$7.94 billion as of September 30.
In a note published following IGT’s third quarter results announcement, brokerage Telsey Advisory Group LLC noted that IGT’s stock price had already risen about 80 percent since the beginning of 2016.
Analysts David Katz and Brian Davis said “the temptation [for investors] to step to the sidelines is meaningful”. But they added: “We believe IGT is in the early stages of a multi-year positive progression and should be considered a core holding for longer-term investors, with periods of weakness viewed as buying opportunities.”
The Tesley team said that IGT’s third quarter revenue had come in above their expectation of US$1.24 billion.
During the conference call with investment analysts following the results announcement, IGT’s leadership confirmed “advanced conversation” with operators in Asia regarding the possible launch of a new mobile application that would allow casino patrons to play slots and back-bet on tables in real time via their smartphones. IGT’s director of sales for Asia, Mark Michalko, recently told GGRAsia that the firm was in discussions with three different casino operators in Asia, one of which is in Macau, about that product.
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”Given that the blanket casino closure [in Macau due to Typhoon Mangkhut] happened on an all-important weekend day… we expect that somewhere between MOP1.1 billion [US$136.2 million] and MOP1.5 billion in GGR will be lost”
Analyst at Union Gaming Securities Asia