GGRAsia – IGT 3Q rev US$587mln, gaming flagged as discontinued ops

IGT 3Q rev US$587mln, gaming flagged as discontinued ops

Nov 13, 2024 Newsdesk Industry Talk, Latest News, World

Gaming equipment maker and content provider International Game Technology Plc (IGT) on Tuesday reported aggregate revenue of US$587 million for the third quarter of 2024, down 2.3 percent from a year earlier.

The third quarter marked the first reporting period where the results of IGT’s gaming and digital business were “classified as discontinued operations,” stated the company.

The group runs three main segments: global lottery; global gaming; and PlayDigital, its online content arm.

IGT is to sell its gaming and digital business to funds managed by affiliates of private equity firm Apollo Global Management Inc, for US$4.05 billion.

Upon completion of the sale of IGT gaming and digital businesses, the current IGT will be a “pure-play lottery company” under a new name and ticker symbol.

The funds linked to Apollo will simultaneously acquire gaming technology supplier Everi Holdings Inc, paying US$14.25 per share in cash. The transactions are expected to be completed by the end of the third quarter of 2025.

Third-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) stood at US$264 million, down 5.4 percent from a year ago.

Adjusted EBITDA margin was 44.9 percent in the period, which the company said “highlight attractive profit profile of pure-play lottery business”. It compared with an adjusted EBITDA margin of 46.4 percent in the third quarter of 2023.

The company reported operating income of US$110 million for the three months to September 30, versus US$163 million in the prior-year period, “primarily driven by a US$38 million restructuring charge associated with … a [multi-year] programme focused on optimising general, administrative and operating activities”.

Tuesday’s announcement cited Vince Sadusky, chief executive of IGT, as saying: “Our third-quarter and year-to-date performance underscores the strength and resilience of our business model marked by our scale, attractive margin structure, and strong cash generation.”

The CEO added: “Over the first nine months, we generated US$1.9 billion in revenue, led by steady Italy [lottery] growth and improved third quarter trends in the U.S. We are excited to build upon a solid foundation as we transform into a leaner, more focused global lottery pure play and capitalise on attractive industry dynamics.”

Max Chiara, the group’s chief financial officer, said in prepared remarks that the firm’s “sustained cash flow generation in the first nine months was predominantly driven by continuing operations”.

“The value of IGT is enhanced on a go-forward basis by a low pro-forma leverage profile and by the launch of a cost optimisation initiative as we look to right size the organisation while supporting long-term growth initiatives,” added Mr Chiara.

The company posted a net income attributable to shareholders of US$7 million for the third quarter, compared to US$94 million in the prior-year period.

IGT’s board declared a quarterly cash dividend of US$0.20 per common share, payable on December 10.

In September, IGT issued – via a subsidiary – EUR500 million (US$531.3 million currently) in senior secured notes, due in 2030. The proceeds were used to redeem the group’s 6.5-percent senior secured notes due in 2025, pay related fees and expenses, and to cover general corporate purposes.