GGRAsia – Ainsworth performance takes bite into Novomatic 1H profit

Ainsworth performance takes bite into Novomatic 1H profit

Sep 03, 2019 Newsdesk Latest News, Top of the deck, World

Austrian gaming technology supplier Novomatic AG says its profit for the first half of 2019 fell by 68.8 percent year-on-year to EUR34.3 million (US$37.7 million).

In a written statement issued last Friday, Novomatic said the performance of Australian slot machine maker Ainsworth Game Technology Ltd in the six months to June 30 had taken a bite into the group’s shrinking first-half profit.

“Due to performance problems in its home market of Australia, Ainsworth Game Technology Ltd recorded a decline in revenues compared to the previous year,” stated Novomatic.

Last Tuesday Ainsworth announced that its revenue in the Australian market fell by 43.2 percent year-on-year to AUD36.1 million (US$24.3 million).

Novomatic took a controlling stake of 52 percent in Ainsworth last year, as part of a rapid expansion driven mainly by acquisitions of smaller operators of gaming facilities in Germany, the Netherlands, Spain and Eastern Europe, predominantly gaming halls, bars and betting businesses.

In Friday’s report, Novomatic added that the reporting period was also impacted by “changes in the legal frameworks” in some of its core markets, such as new technical standards for slot machines introduced in Germany, and tax increases in Italy.

“Overall, declines in sales revenues in individual markets caused by regulatory challenges were almost entirely offset at the group level,” said the company.

Novomatic’s earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 5.1 percent to EUR297.1 million in the first six months of 2019, after hitting a record high of EUR313.0 million a year earlier.

The company reported revenues of EUR1.26 billion, 1.8 percent less than in the prior-year period, with declines in the markets of Germany and Italy. Novomatic said revenues increased in other core markets such as Austria, Spain and the Netherlands.

The company said 63 percent of its sales revenue was from its gaming operations business, which runs gaming machines around the globe, and the rest was from its gaming technology business.

Novomatic’s gaming technology business announced in January deals to supply 200 slot machines and 125 electronic table game terminals – about 35 percent of the slots on the floor – at the Corona Resort and Casino in Vietnam.

The Novomatic group has continued its push into the Asian market. Novomatic and Ainsworth displayed at the Global Gaming Expo (G2E) Asia exhibition in Macau last May a new range of games with themes it hopes will appeal to Asian customers.

The company said it continues to focus on consolidation to “increase company efficiency and achieve strong synergies” between the various holdings of the company.

Novomatic AG is part of the Novomatic group. The group comprises three holding companies: Novomatic AG, ACE Casino Holding AG and Gryphon Invest AG, which together have stakes in 300 companies.