GGRAsia – Sci Games sees quarterly loss narrow sequentially in 3Q

Sci Games sees quarterly loss narrow sequentially in 3Q

Nov 05, 2020 Newsdesk Industry Talk, Latest News, Top of the deck

Casino equipment, lottery services and online-games provider Scientific Games Corp said in a Wednesday filing that its third-quarter net loss attributable to shareholders narrowed to US$111 million, compared to US$203 million in the second quarter.

In the third quarter of 2019 it had achieved a positive result, namely net income of US$18 million.

The quarter-on-quarter narrowing of the loss in the three months to September 30 this year, was aided by factors including a 29.5-percent sequential improvement in revenue, to US$698 million, from US$539 million in the second quarter.

“As a result of our team’s focus on our strategy, our diverse portfolio and our commitment to cost management, we delivered strong cash flow in the third quarter,” of this year, said Barry Cottle, Scientific Games’ chief executive, in commentary quoted in a press release accompanying the results.

Third-quarter 2019 revenue had been US$855 million, 18.4 percent higher than the current reporting period.

The company said third-quarter revenue this year from its gaming and lottery segments was “negatively impacted” by the Covid-19 pandemic. But the group stated that its SciPlay digital social games and the digital real-money gaming businesses “grew in the quarter.”

Group consolidated adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA), decreased 31.7 percent to US$235 million from US$344 million in the prior-year period, “driven by Covid-19 disruptions” and impacted by a US$24-million loss on remeasurement of debt.

In the third quarter, revenue in the traditional gaming segment fell 49 percent year-on-year, to US$231 million. That included a 38.3-percent decline in the gaming operations segment, to US$92 million, from US$149 million a year earlier; and a 57.7-percent fall in revenue from sales of gaming machines, to US$71 million, from US$168 million in the prior-year quarter. The gaming segment recorded adjusted EBITDA income of US$77 million, down 66 percent from the US$226 million a year earlier.

In the international portion of the group’s market for gaming machine sales – including the Asia-Pacific region – new unit shipments in the three months to September 30 fell 30.9 percent year-on-year, to 1,887, from 2,731. Aggregate shipments fell 39.5 percent year-on-year, to 5,001, from 8,261, due to a decline in units shipped in the United States and Canada markets.

In the SciPlay segment, revenue rose by 30.2 percent year-on-year, to US$151 million from US$116 million a year earlier; while the separate digital segment saw a 15.4-percent growth in revenue, to US$75 million, from US$65 million. The SciPlay and digital segments saw more than 50 percent and nearly 50 percent adjusted EBITDA growth, respectively, said Scientific Games.

CEO Mr Cottle said in his remarks in the accompanying press release, that the firm would – in concert with “proven industry leaders” recently added to the board – focus on “de-levering our balance sheet”.

The group said it had available liquidity of US$1.2 billion at the end of the third quarter.

Scientific Games’ net debt as of September 30 was US$8.47 billion, down from US$8.6 billion a year earlier.

Michael Eklund, executive vice president and chief financial officer of Scientific Games, was quoted as saying in the release: “Looking ahead, our team will remain highly focused on driving operational efficiencies, further bolstering our liquidity and strengthening our balance sheet”.