IGT 3Q EBITDA down 8pct despite strong gaming sales
Gaming and lottery services and products provider International Game Technology Plc (IGT) said on Thursday that its consolidated revenue was flat in year-on-year terms, at slightly above US$1.15 billion in the third quarter of 2019. At constant currency, third-quarter revenue would have increased by 3.0 percent, “on significant growth in global gaming product sales,” said the company.
IGT reported operating income of US$153.9 million for the three months ended September 30, down 23.1 percent from the prior-year quarter.
Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were US$407.1 million, down 8.2 percent in year-on-year terms.
Net income attributable to IGT was nearly US$103.6 million in the July-September period, compared to US$22.3 million in the prior-year period. The group declared an interim cash dividend of US$0.20 per share on its ordinary shares. The dividend is payable on December 13, to holders of record as of the close of business on November 29.
“Our core businesses achieved significant momentum in the third quarter and year-to-date periods,” said Marco Sala, chief executive of IGT, in a prepared statement included in Thursday’s release.
He added: “Key performance indicators were solid in the quarter – gaming machine unit shipments increased 44 percent, while same-store revenue for draw games and instants rose 4 percent. Our leading positions are rooted in our focus on player-driven performance, which was on display at recent lottery and gaming trade shows and should sustain our momentum going forward.”
IGT’s net debt stood at approximately US$7.35 billion at the end of the third quarter, compared to nearly US$7.57 billion a year earlier.
Alberto Fornaro, IGT’s chief financial officer, was also quoted in the release as saying that IGT had generated free cash flow “in excess of US$450 million” in the first nine months of 2019. “This confirms the inflection we expected to achieve this year. We are well positioned to achieve our 2019 strategic and financial goals,” stated Mr Fornaro.
IGT said that total gaming revenue from international markets – i.e. excluding North America and Italy – rose by 27 percent year-on-year on a fixed exchange rate to US$118 million in the three months ended September 30. Gaming service revenue was US$27 million, down 12 percent at constant currency, while gaming product sales revenue stood at US$91 million, up 46 percent from the prior-year period.
The company said it had a “broad-based geographic demand” for gaming products in the third quarter. The group shipped 5,244 gaming machine units to international markets during the reporting period, up 63.4 percent compared to 3,210 units a year earlier.
“It was a strong quarter for our global gaming business. Unit sales of gaming machines were 44-percent greater than the prior year period, driven by a 62 percent increase in replacement units,” said IGT’s Mr Sala on a conference call with analysts.
He added: “North America replacement units rose 38 percent … International replacement units increased nearly 90 percent, benefiting from large Sweden VLT (video lottery terminals) shipments in the period. Commercial gaming replacements were up double digits, with demand well balanced between CrystalCurve and Crystal 27 cabinets.”