U.S.-based Scientific Games Corp posted a 66-percent year-on-year jump in second quarter revenue to US$691.5 million, the company announced on Monday. Its net loss however widened to US$102.2 million from US$72.4 million, affected, it said, by costs and charges related to the acquisition and integration of gaming equipment makers Bally Technologies Inc and WMS Industries Inc.
Scientific Games reported an operating loss of US$0.1 million in the quarter ending June 30, compared to operating income of US$3.6 million in the year-earlier period.
In 2014, Scientific Games’ second quarter results did not include Bally Technologies.
Scientific Games, originally a specialist in lottery equipment and management, last November acquired slot machine and floor management systems specialist Bally Technologies in a transaction valued at US$5.1 billion. The deal came approximately one year after Bally Technologies acquired Nevada-based table games equipment and slot machine supplier SHFL entertainment Inc in a US$1.3-billion transaction.
In 2013, Scientific Games took over U.S.-based slot-machine maker WMS for US$1.5 billion.
In the second quarter 2015, on a quarter-on-quarter basis (including Bally Technologies’ contribution), revenue at Scientific Games was up 5 percent, while the group’s net loss widened by US$15.8 million.
“Throughout the second quarter we made further significant progress on implementing our key initiatives, targeting revenue growth opportunities, advancing our comprehensive integration efforts and implementing our planned cost savings,” the president and chief executive of Scientific Games, Gavin Isaacs (pictured), said in a statement.
He added: “Our focus on accelerating revenue growth is balanced with our commitment to deliver the realisation of anticipated cost savings that will drive expected further enhancement of operating margin and cash flow in the second half of 2015 and beyond.”
Mr Isaacs said that by July 31, Scientific Games had implemented US$184-million in Bally Technologies-related annual cost savings. Those were mostly related with the elimination of duplicated positions in the gaming and interactive businesses and corporate functions, as well as the elimination of duplicated overhead costs, the firm said.
“As a result of accelerating actions originally planned for 2016 into 2015, we are raising our first-year target from US$188 million of cost savings to an expected US$200 million, while also implementing an additional US$30-million of WMS-related annual cost savings by the end of 2015,” he stated.
Scott Schweinfurth, chief financial officer of Scientific Games, noted that as a result of the firm’s cost saving initiatives, margin on second quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) increased to 38 percent from 32 percent in the prior-year quarter.
For analysts Carlo Santarelli and Danny Vanoy from Deutsche Bank Securities Inc, the second quarter results of Scientific Games “came in modestly below” forecasts.
They added: “Following a second quarter 2015 miss, disappointing free cash flow (FCF) generation and limited signs of optimism in the segment results, our thesis and [sell] rating are unchanged as we see the following risks to shares at current levels: 1) aggressive FCF targets which we think prove to be lofty; 2) elevated financial leverage in a challenged environment in which to de-lever; 3) continued core gaming equipment trend deterioration; and 4) elevated consensus estimates, which imply core acceleration in excess of synergy realisation.”
Apr 25, 2018Macau’s casino regulator has approved the introduction of a new betting option for the casino game of baccarat as it is offered in the local market. The announcement was published in the city’s...
Apr 25, 2018
Jan 04, 2018BMM Testlabs “ticks all the boxes” with regard to its...
Dec 08, 2017The regulated casino industry is well versed in dealing...
Oct 23, 2017The presence of some of the leading cloud computing...
Jul 11, 2017The Tokyo local election setback for Japan’s governing...
Jul 06, 2017A multibillion U.S. dollar casino project on Vietnam’s...
"As CEO, I am not interested in looking at the rear-view mirror… I am only focused in the future"
Chief executive of Wynn Resorts and Wynn Macau