GGRAsia – L&W posts US$21mln profit in 4Q, revenue up 18pct y-o-y

L&W posts US$21mln profit in 4Q, revenue up 18pct y-o-y

Mar 02, 2023 Newsdesk Industry Talk, Latest News, Top of the deck

Casino equipment and online games provider Light & Wonder Inc (L&W) – previously known as Scientific Games Corp – saw its group-wide revenue rise 17.6 percent year-on-year in the fourth quarter of 2022, to US$682 million. Such growth was supported by “double-digit growth across all lines of business”, with land-based gaming “maintaining strong momentum,” it said in a filing on Wednesday announcing its results for the final quarter of 2022.

Light & Wonder reported a net profit from continuing operations of US$21 million in the three months to December 31, compared to US$62 million a year earlier. The firm said the results for the final quarter of 2021 had been positively impacted by an income tax benefit.

The company posted a net loss from continuing operations of US$176 million for full-year 2022 compared to a net profit of US$24 million in the prior year. Despite recording “higher revenue and operating income” last year – as well as lower interest expense – the company results were impacted by a US$147-million loss on debt financing transactions, it stated.

The company said that it had completed in 2022 its “strategic transformation”, resulting in “a streamlined organisation and deleveraged balance sheet.”

In the third quarter of last year, Light & Wonder completed the sale of the group’s sports betting business, OpenBet, to Endeavor Group Holdings Inc, involving total gross proceeds of approximately US$800 million. In April, the group finalised the sale of its lottery business.

In prepared remarks featured in the results release, the president and chief executive of Light & Wonder, Matt Wilson, said that 2022 had been “a pivotal year” for Light & Wonder. “We delivered on an ambitious and transformative plan while driving operational success and double-digit growth in our business,” noted Mr Wilson, who was confirmed in October last year as chief executive of Light & Wonder.

The company’s quarterly consolidated adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were up 22.7 percent year-on-year, at US$265 million. The company said the adjusted EBITDA result had been primarily benefited by growth in its land-based gaming business.

The firm stated its net debt leverage ratio had declined by 47 percent, to 3.3 times at 2022-end, from 6.2 times a year earlier. “We paid down approximately US$4.8 billion of debt during 2022, reducing debt outstanding by 55 percent to US$3.9 billion at the end of 2022,” Light & Wonder said.

Wednesday’s release quoted Connie James, the firm’s chief financial officer, as saying the firm had returned “significant capital” to its shareholders, totalling US$413 million since Light & Wonder’s share repurchase programme was announced a year ago. “We now have a strong balance sheet and clear roadmap to advance with discipline on our balanced and opportunistic capital allocation strategy,” she said.

Fourth-quarter land-based gaming revenue increased by 17.7 percent year-on-year, to US$438 million. Light & Wonder said the improvement was “driven by another quarter of robust gaming machine sales growth”; the latter amounting to 40.5 percent in year-on-year terms.

Within that segment, revenue from gaming operations remained flat year-on-year, at US$157 million, but still “above 2019 levels” and “with continued elevated average daily revenue per unit”, Light & Wonder said. Sales revenue for gaming machines reached US$156 million in the fourth quarter of 2022, compared to US$111 million a year earlier.

Adjusted EBITDA for the land-based gaming segment were US$215 million, up 15.6 percent compared to the prior year period.

The company said it sold 7,760 gaming machine units in the three months to December 31, up 37.9 percent compared to 5,629 a year earlier. Such shipments included 2,661 units sold in the international market, including Asia Pacific, up from 2,140 machines in the prior-year quarter.