Casino equipment and online games provider Light & Wonder Inc – previously known as Scientific Games Corp – reported a net profit attributable to its shareholders of US$26 million in the first quarter, compared to a net loss of US$15 million in the prior-year period. The improvement was the “result of higher operating income driven by double digit revenue growth,” the firm said in a Tuesday press release.
Accounting only for the group’s continued operations, Light & Wonder reported a net loss of US$67 million in the first three months this year, compared to a loss of US$88 million a year earlier.
First-quarter consolidated revenue was US$572 million, up 26.3 percent from a year earlier. “Our gaming business demonstrated continued strong momentum in the North American market including growth in all lines of business year-over-year, with total gaming operations revenue exceeding 2019 levels,” before the onset of the Covid-19 pandemic.
“Revenue also benefited from sequential and year-over-year growth at our SciPlay and iGaming businesses,” stated the gaming supplier.
The group’s quarterly consolidated adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) from continuing operations were up 42.3 percent year-on-year, at US$202 million.
Light & Wonder completed in April its rebranding exercise, as the “culmination of a year-long strategic process” of restructuring.
The gaming supplier also completed last month the sale of its lottery business to Brookfield Business Partners LP and the latter’s institutional partners. The sale of its lottery business generated US$5.6 billion in gross cash proceeds.
Light & Wonder said it has “significantly de-levered and transformed” its balance sheet in April, as a result of a debt pay down and refinancing transactions, that reduced the principal face value of debt outstanding to US$4.0 billion, from U$8.9 billion as of March 31.
Light & Wonder is also selling its sports betting business: the deal is due to be closed in the third quarter this year. The firm is to get US$1-billion in cash and US$200-million in stock from the acquiring business, United States-listed Endeavor Group Holdings Inc, a sports and entertainment firm.
Higher sales, acquisition
Tuesday’s release quoted Barry Cottle, Scientific Games’ president and chief executive, as saying: “We kicked off 2022 with a number of significant achievements and strong momentum across our businesses.”
“The sale of our lottery business was another significant milestone as we de-lever and maximise cash, which transformed our balance sheet reducing our net debt leverage ratio from a peak of 10.5 times just over 15 months ago to an adjusted net debt leverage ratio of 3.7 times,” he added.
First-quarter gaming revenue increased by 45.5 percent year-on-year, to US$355 million. Light & Wonder said such growth was “primarily driven by continued market recovery reflecting strong growth in gaming operations, which exceeded 2019 levels driven by record North America premium installed base units, continued elevated average daily revenue per unit, coupled with growth in game sales, systems and table games businesses.”
Revenue from gaming operations rose by 37.2 percent year-on-year, to US$155 million. Sales of gaming machines reached US$103 million in the first three months of 2022, up 87.3 percent from a year ago.
The company said it sold 5,296 gaming machine units in the three months to March 31, compared to 2,599 a year earlier. Such shipments included 1,914 units sold in the international market, including Asia Pacific, up from 656 machines in the prior-year quarter.
SciPlay revenue grew by 4.6 percent year-on-year to US$158 million in the first three months of 2022, “the second highest quarter in its history,” stated the company.
Connie James, the group’s chief financial officer, said the company was “actively executing” on its capital allocation priorities, “including US$140 million return on capital” via the repurchase of shares since the beginning of March.
“Going forward we are accelerating our focus on our operations as we complete these transactions, and the next phase of our growth strategy will drive further operational excellence throughout our organisation creating sustainable and profitable long-term growth,” she added.
On Tuesday, Light & Wonder said it acquired Playzido Ltd, a U.K.-based dynamic content creation platform provider and game supplier, which will “fuel” the group’s iGaming content offering. The company said the acquisition would accelerate the partnership strategy that had already been instrumental in the creation of content for studios like Lightning Box, which was also recently acquired by Light & Wonder.
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