Casino equipment maker and lottery services provider Scientific Games Corp said on Thursday its fourth-quarter 2016 revenue rose by 2.1 percent year-on-year to US$752.2 million. The revenue growth in the period included “a 52 percent increase in social B2C [business-to-consumer] gaming, as well as a 37 percent increase in table products,” the firm said in a press release.
Nasdaq-listed Scientific Games reported attributable earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$$293.5 million for the three months to December 31, compared to US$292.9 million in the prior-year period. The company said the improvement was due to lower selling, general and administrative expenses.
Operating loss for the period was US$12.3 million, compared to US$54.4 million in the prior-year period. The firm said the 2016 fourth-quarter operating loss included a US$69.0 million non-cash goodwill impairment charge and restructuring; and other charges of US$36.3 million.
Net loss for the three months to December 31 narrowed to US$110.8 million, compared to US$127.5 million a year earlier.
“The 2016 fourth quarter was the fifth consecutive quarter of growth, with year-over-year revenue growth besting last year’s strong performance,” said Kevin Sheehan, Scientific Games’ chief executive, in a statement.
He added: “Our gaming division continues to lead with innovation and strong execution, including the launch of the Gamescape platform, which in the fourth quarter helped drive the first quarterly sequential increase in our wide-area progressive (WAP) premium-participation installed base in more than three years, as well as the initial very promising performance of our innovative TwinStar J43 for-sale gaming cabinet.”
Scientific Games’ gaming segment – which includes gaming operations, gaming machine sales, systems and table products – recorded total revenue of U$460.9 million for the three months ended December 31, down 1.7 percent from a year earlier. The company said the result included a US$7.8-million unfavourable impact related to foreign currency.
Gaming machine sales revenue declined 2.6 percent year-on-year to US$169.5 million in the fourth quarter. The company shipped 9,234 new gaming machines in the fourth quarter, including 5,115 new units shipped to North America customers and 4,119 units to international customers.
Revenue from sales of table products increased 36.6 percent year-on-year, to US$54.9 million. The segment growth was “due to an increase in sales of shufflers and other utility products, primarily into Asian markets,” said the company.
Fourth-quarter revenue for Scientific Games’ lottery business went down 3.9 percent year-on-year to US$199.7 million. Total revenue for the interactive segment increased by 51.9 percent year-on-year, to US$91.6 million.
For full-year 2016, the Las Vegas-based company said its revenue grew by 4.5 percent in year-on-year terms to US$2.88 billion. The firm posted operating income of US$130.6 million for the year, compared to an operating loss of US$1.02 billion in 2015. Net loss for the full year narrowed to US$353.7 million, compared to US$1.39 billion in the previous year.
Scientific Games said it reduced the principal amount of its total debt by US$169.4 million in 2016, leaving the company with total debt of US$8.02 billion at the end of the year.
Scientific Games chief financial officer Michael Quartieri said in a statement: “We continue to refine our business processes to yield greater financial discipline, while ensuring continued investment in innovation to drive profitable growth. While improvement initiatives implemented in the fourth quarter had a cash cost of US$6 million, we expect these actions will expand our margins and cash flow in 2017.”
Earlier this month, Scientific Games took steps to reduce its annual cash interest burden “by approximately US$30 million at current rates, while extending the average maturity of our capital structure,” the firm said. The transactions included a private offering of US$1.15 billion in aggregate principal amount of 7.0 percent senior secured notes due 2022.
“We expect these steps will yield a planned increase in cash flow that supports our goal of additional deleveraging in 2017,” said Mr Quartieri.
Feb 16, 2018Due to the Chinese New Year holiday, the GGRAsia team will be off between February 16 and 19. We will be back on February 20. We wish all our readers a prosperous Year of the Dog!
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