Gaming and lottery provider International Game Technology Plc (IGT) has posted a net loss of US$167.7 million for the fourth quarter of last year, compared with a US$102.0-million loss in the corresponding period in 2018. The firm said its net income for the period was negatively affected by non-cash foreign-exchange losses and a non-deductible goodwill impairment charge of US$99 million.
The firm added in its fourth-quarter results it was also monitoring the potential negative impact on business for 2020 of the ongoing Covid-19 public health crisis.
IGT recorded a year-on-year fall in fourth-quarter revenue of about 1.0 percent, to US$1.25 billion.
For the three months ending December 31, adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) actually increased, by about 4.7 percent, to US$435.5 million compared to the US$416.0 million in the corresponding period in 2018.
IGT announced its fourth-quarter results in London on Tuesday, coinciding with the start of that day’s trading on the New York Stock Exchange, where IGT is listed.
IGT said it had achieved “record global gaming product sales” for full-year 2019. The company posted a net loss of US$19 million for the 12 months ended December 31.
“We achieved the high end of our profit and cash flow expectations for 2019, led by strong results for our North America gaming and Italy segments,” IGT chief executive Marco Sala said in prepared comments released with the financial data.
He added: “In the full year, we grew global gaming product sales by more than 20 percent thanks to higher unit shipments and the success of our new games.”
Mr Sala added that IGT was monitoring the potential negative effect of the Covid-19 crisis on the casino supplier industry. The group has significant business in the lottery sector in Italy, a country with one of the highest reported tallies of Covid-19 infection outside China.
“We are closely monitoring the impact of the coronavirus outbreak,” he was quoted as saying. “Apart from this, solid operational performance across products and regions should support continued momentum in 2020,” added Mr Sala.
The Macau Gaming Equipment Manufacturers’ Association, a body also known as MGEMA, said in February it expected budget allocated by casino operators for procurement of new electronic gaming machines to “shrink” in the near term due to the coronavirus crisis.
Investment analysts have noted that there is currently little clarity in terms of when the consumer side of the Macau gaming market will return to normality, with travel restrictions out of mainland China – the biggest single market for the city’s gamblers – still in place.
Intl machine shipments down 4Q
IGT earns the majority of its revenue from its Italian operations – some US$448 million in the fourth quarter of this year, which includes lottery products and services. Fourth-quarter revenue here was down by about 3.0 percent.
The company’s next-biggest source of revenue in the final three months of 2019 was from gaming and interactive businesses in North America – US$300 million, a US$25-million or 9.1-percent year-on-year growth. Revenues from IGT’s North American lottery business were down by about 9.7 percent in year-on-year terms to US$279 million.
IGT’s international division – including Asia – generated quarterly revenue of US$226 million, up 2.3 percent from the US$221 million in the same period in 2018. Revenue from IGT’s international gaming division rose 3.1 percent, from US$127 million in the fourth quarter of 2018, to US$131 million in the final quarter of last year.
IGT says there was a 23.1-percent decrease year-on-year in the number of new machines it shipped to international markets last quarter, to 406 units.
The number of slot machines installed in casinos in international markets during the fourth quarter shrank by 8.7 percent in year-on-year terms, from 10,636 to 9,709.
The company’s net debt position declined to US$7.38 billion as at the end of last year. It was US$7.76 billion at the end of 2018.
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Andrew Lee and David Katz
Analysts at brokerage Jefferies LLC