GGRAsia – Ainsworth 1H rev rises 20pct y-o-y, write-down leads to loss

Ainsworth 1H rev rises 20pct y-o-y, write-down leads to loss

Sep 01, 2023 Newsdesk Industry Talk, Latest News, Top of the deck

Australia-listed slot machine maker Ainsworth Game Technology Ltd reported an after-tax loss of AUD3.7 million (US$2.4 million) for the six months ended June 30, compared to an after-tax profit of AUD2.7 million in the first half of 2022.

Ainsworth – majority-owned by Austria’s Novomatic Group AG – said in a filing on Thursday that its group-wide revenue rose by 20.2 percent year-on-year, to AUD143.6 million. Revenue was up 15.7 percent sequentially.

As previously disclosed by the company, a full write-down of the carrying value of investments held in Argentina was completed in the reporting period. The firm said that “delays in court proceedings” and “minimal access to information to reliably assess the recoverability on these investments, necessitated the write-down”.

Ainsworth added: “The decision to write down these investments considered the macro-economic uncertainties and political instability in the region… These conditions have contributed to the Argentinian peso continuing to experience significant devaluation against the U.S. dollar which would have negatively impacted the company in coming periods.”

The company’s underlying profit after tax – i.e., adjusted for currency impacts and significant one-off items outside ordinary business activities – stood at AUD18.5 million, an improvement of 1.6 percent in year-on-year terms. The firm’s results for the first half included an investment write-down in the amount of AUD12.9 million.

The Asia-Pacific region – consisting of Australia, New Zealand, and Asia – accounted for slightly under 14.8 percent of Ainsworth’s revenue in the reporting period. Revenue from those markets stood at AUD21.2 million for the six months ended June 30, a year-on-year decline of 6.6 percent. The figure was down 14.9 percent sequentially.

Ainsworth posted a AUD248,000 segment loss for its Asia-Pacific operations in the first half of 2023, compared to a profit of AUD2.8 million a year earlier. The firm said that was related to fixed costs and lower revenue achieved in the reporting half.

Asia-Pacific was the only regional operation posting a segmental loss.

In a presentation accompanying its results announcement, Ainsworth referred to an “increase in unit sales related to Asia”, on the back of a “market recovery post pandemic”.

The firm added that a “change in sales distributor and new venue openings specifically in the Philippines” was “expected to drive revenue in this market in future periods.”

Company-wide earnings before interest, taxation, depreciation, and amortisation (EBITDA) were AUD14.0 million, versus AUD12.5 million in the prior-year period, said the gaming supplier. EBITDA was down 6.0 percent sequentially.

No dividend was declared for the latest reporting period. The firm said that the “dividend continues to be suspended to provide strong liquidity to allow the company to continue to invest in research and development to deliver competitive products and to navigate the volatile macro conditions in Latin America.”

Harald Neumann, Ainsworth’s chief executive, said in prepared remarks that “progress [in the group’s performance] has continued in the current period against the strategies implemented to improve earnings from Ainsworth.”