GGRAsia – IGT 2Q revenue down 1pct, adjusted EBITDA up 4pct

IGT 2Q revenue down 1pct, adjusted EBITDA up 4pct

Aug 01, 2018 Newsdesk Industry Talk, Latest News, Top of the deck

Gaming and lottery services and products provider International Game Technology Plc (IGT) said on Tuesday that its consolidated revenue declined by almost 1.5 percent year-on-year to approximately US$1.20 billion in the second quarter of 2018, compared to US$1.22 billion in the prior-year period.

Net income attributable to IGT was nearly US$161.5 million in the second quarter of 2018, compared to a loss of approximately US$290 million in the prior-year period. It included US$173 million of net foreign exchange gain, the firm said, adding that adjusted net income for the period was US$57 million.

IGT’s net debt stood at approximately US$7.53 billion at the end of the second quarter 2018, compared to nearly US$7.32 billion as of December 31, 2017.

IGT reported operating income of US$209 million for the three months ended June 30, up 8.9 percent in year-on-year terms.

Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were US$441.8 million, up 4.2 percent compared to US$423.7 million in the second quarter of 2017. The company said in a press release the increase in adjusted EBITDA was due to “robust global lottery performance and disciplined operational management”.

“The North America gaming installed base grew sequentially, and we have a compelling roster of new, for-sale video reel games coming to market in the second half,” said Marco Sala, chief executive of IGT, in a prepared statement included in Tuesday’s release.

Alberto Fornaro, IGT’s chief financial officer, was also quoted in the release as saying that the firm was maintaining its full-year performance estimates based on the results for the first six months of 2018. “With better-than-expected adjusted EBITDA growth of 10 percent in the first half, we are raising our full-year outlook for the underlying business,” he said. “As a result, we are able to absorb the negative impact of foreign currency translation and maintain the adjusted EBITDA range of US$1,700 million to US$1,780 million for 2018.”

The company’s board declared a quarterly cash dividend of US$0.20 per share, payable on August 28. IGT is to hold an investor day activity on Thursday.

Brokerage Deutsche Bank Securities Inc said in a Tuesday note that IGT had posted “strong second quarter 2018” results.

“We believe IGT remains an inexpensive way to capitalise on: an expanded and well received gaming hardware and content library in a healthy domestic [U.S.] gaming environment; global lottery growth in the presence of major lottery contract stability/runway; continued international gaming expansion; and accelerating discretionary free cash flow generation,” wrote analysts Carlo Santarelli and Danny Valoy.

IGT said that total gaming revenue from international markets – i.e. excluding North America and Italy – decreased by 13.7 percent year-on-year to US$101 million in the three months ended June 30. The company shipped 3,120 gaming machine units to international markets during the reporting period, compared to 3,591 units a year earlier.

“International unit sales declined 13 percent year-on-year due to lower replacement activity (Latin America), as replacement units were down 24 percent year-on-year, while expansion units climbed 66 percent year-on-year,” noted Deutsche Bank in its Monday note.

IGT did not provide detailed information about its performance in Asia during the second quarter of 2018.