GGRAsia – Ainsworth reports 1H loss as international sales dip

Ainsworth reports 1H loss as international sales dip

Feb 24, 2020 Newsdesk Industry Talk, Latest News, World

Australia-based slot machine maker Ainsworth Game Technology Ltd reported on Monday a net loss of AUD4.0 million (US$2.6 million) for its fiscal first half ended December 31. That compares with a profit of AUD12.1 million in the prior-year period, according to the results filed with the Australian Securities Exchange.

Revenue for the firm’s fiscal first half stood at AUD107.3 million, down 9.1 percent compared to AUD118.0 million a year earlier.

Group earnings before interest, taxation, depreciation and amortisation (EBITDA) were AUD14.6 million, down 55.2 percent compared with AUD29.7 million in the prior-year period. Group-wide EBITDA on a underlying basis – excluding the impact of currency and other certain significant items and adjustments outside ordinary business activities – stood at AUD17.2 million, a decline of 28.0 percent year-on-year.

In Monday’s earnings report, Ainsworth said revenues from its international segment – involving the ‘rest of the world’ and the North America and Latin America markets – amounted to AUD87.8 million, down 10.7 percent from a year earlier. “Revenue has decreased in all international jurisdictions, predominantly in Americas, followed by Europe then Asia, respectively,” said the company.

Revenue in the ‘rest of the world’ segment – namely Europe, Asia and New Zealand – was AUD4.3 million for the six months to December 31, a decrease of 51.1 percent from a year earlier. In Asia, gaming machine and parts sales and licence income plummeted 80.1 percent year-on-year to AUD474,000, from nearly AUD2.4 million in the prior-year period.

Revenue from participation and leased machines under operation in the international segment was AUD24.7 million, an increase of 18.5 percent compared to the prior corresponding period, said the firm. This represented a contribution of 28.1 percent of total international revenue, it added. The company had an aggregate of 6,604 units under its gaming operations as of December 31, up 6 percent from a year earlier.

In Australia, the firm’s domestic market, Ainsworth said revenue fell by 1.0 percent year-on-year, to AUD19.5 million. The firm said that such reduction in revenue reflected “the challenging domestic market and competitor factors,” prior to the release of the group’s new line of slot machine cabinets, known as the A-Star range.

“Further game releases on the new hardware are expected to provide increase opportunities within all domestic and international markets in the second half of fiscal year 2020,” stated the slot-machine maker.

The firm’s chief executive Lawrence Levy said in commentary accompanying the first-half fiscal results that the firm was “making progress” in implementing measures “to strengthen Ainsworth to deliver improved results”.

“The transition is in progress to make Ainsworth more profitable and efficient. We are re-evaluating research and development, increasing our game development resources, sharpening our sales and marketing focus and complementing organic growth with selective acquisitions,” he added. “We are busy building the foundations and expect return to profitability to deliver a positive net profit in the second half of fiscal year 2020, with better results in fiscal year 2021.”

The Ainsworth CEO also confirmed that production of the new A-Star cabinet was “underway,” and that sales had “now commenced across all global markets”.

He added: “We are making good progress in upgrading our game development capabilities to accelerate the timely release of a greater number of quality titles.”

In Monday’s filing, Ainsworth said that due to the “transition to a new hardware and game product suite” and increased investment in research and development, the firm’s board had “resolved to defer the reinstatement of the dividend policy at the present time”.