Ainsworth warns pandemic to hurt biz for some months
Slot machine maker Ainsworth Game Technology Ltd has withdrawn guidance regarding likely profitability in financial-year 2020. It has also warned investors that it expects the decline seen in casino-operator and consumer spend on gaming-machine product across its major markets – due to the coronavirus pandemic – to last for some months.
“Ainsworth is seeing a reduction in expected capital expenditure from customers on gaming machines and a reduction in participation revenues in all markets,” the firm noted in a Monday filing to the Australian Securities Exchange.
It added: “While it is difficult to predict the duration of this market uncertainty and revenue impact, Ainsworth expects these conditions to prevail through the fourth quarter of financial-year 2020.”
Ainsworth’s financial year begins on July 1 and runs until June 30 of the following calendar year.
The group reported its first-half earnings – up to December 31 – in late February, showing a loss and featuring a near 11-percent fall overall in international sales, although it said Asia did better than other international markets.
In recent days casino markets in Australia and in the United States have announced suspension of casino business as part of efforts in those nations to address the spread of the novel coronavirus associated with the Covid-19 disease.
In Asia Pacific, the Philippines has shut down its casino sector. Other markets remain open, but reportedly with severely-constrained earnings due to factors including bans either on all foreigners or on people travelling from infected areas.
Ainsworth stated in its latest filing: “Government-mandated public-health initiatives concerning Covid-19 have resulted in a large number of gaming and hospitality venues across Ainsworth’s major markets [being] temporarily closed with others seeing materially reduced visitation levels.”
The firm said it was withdrawing previous guidance to the market – issued in February – that it expected to report profitability for financial-year 2020.
“As further impacts of Covid-19 become clearer updates will be provided accordingly,” the group stated.
The company said additionally that it was implementing measures including “cost-reduction initiatives” to “mitigate the financial impact of Covid-19”.
Lawrence Levy, the group’s chief executive, was quoted as saying in Monday’s announcement: “These are unprecedented times with our industry clearly suffering from the impact of Covid-19. Ainsworth is taking steps to mitigate the financial impacts of reduced revenue.”
The CEO added: “Our game development programmes, which are the key to Ainsworth’s long-term sustainable profitability, remain unaffected and on track”.
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