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IGT posts $838.7m loss as Covid-19 closures drive 2020 revenue down


International Game Technology (IGT) has reported a net loss of $838.7m for its 2020 financial year, after the closure of casinos and other restrictions caused by the novel coronavirus (Covid-19) pandemic led to a sharp drop in revenue.

Total consolidated revenue in the 12 months through to December 31 amounted to $3.12bn, down 22.7% from $4.03bn in the previous year, with IGT seeing declines across both its global lottery and global gaming businesses.

With IGT now split into two divisions – global gaming and global lottery – the latter made up most of the supplier’s revenue and was more resilient.

Global lottery revenue dropped 5.6% year-on-year to $2.16bn, though IGT said this decline demonstrated “remarkable resilience”, considering the impact that Covid-19 had on the segment. Global same-store sales remained stable, while double-digit North America same-store sales growth drove recovery in H2.

Services revenue accounted for $2.04bn of global lottery revenue, down 6.4% on last year, while the remaining $121.0m came from product sales, with this up by 10.0%.

Global gaming revenue fell 45.3% to $951.0m, with this part of the business the most hit by Covid-19. IGT noted the impact of pandemic-related casino closures and operating restrictions, but was slightly helped by a rise in digital and betting service revenue.

Global gaming service revenue was 35.0% lower at $597.0m, while revenue from product sales more than halved from $821.0m in 2019 to $355.0m last year.

In terms of geographical performance, the US and Canada remained by far IGT’s core markets, with revenue here reaching $1.75bn, down 21.8% year-on-year. Italy revenue fell 9.2% to $862.0m, while rest of world revenue declined 40.3% to $505.0m.

IGT noted that consolidated revenue also included $170.0m in digital and betting revenue, with this increasing 30.8% to $170.0m.

Looking at spending in the full year, total operating expenses were 9.3% lower at $3.22bn, with costs reduced in almost all parts of the group. The only exceptions were restructuring, with costs here up 80.7% to $45.0m and a goodwill impairment of $296.0m, compared to $99.0m in 2019.

This led to an operating loss of $107.5m, a stark contrast to the $477.9m profit in 2019, while adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 30.4% to $1.01bn.

Total non-operating expenses jumped by 111.6% to $740.2m, primarily due to a loss of $308.9m on foreign exchange, compared to a $39.9m net gain in 2019.

Loss before tax was $847.7m, compared to a $128.0m profit in 2019, and after paying $27.7m in tax, this left an $875.4m loss from continuing operations. When taking into account $36.7m in profit from discontinued operations, net loss was $838.7m, down from a $111.7m profit in 2019.

However, IGT also accounted for a negative impact of $63.9m attributable to non-controlling interests from continuing operations, resulting in an overall net loss of $897.9m, compared to $19.0m in the previous year.

Despite the drop in revenue and increased loss, IGT chief executive Marco Sala was upbeat about the group’s future, saying the “solid results” achieved in 2020 will allow for momentum moving into 2021.

“They are a result of the vision, agility, and discipline of the IGT team as well as the distinct advantages of our diverse portfolio,” Sala said.

“We also made important strategic progress. The company undertook a comprehensive reorganization to sharpen our focus on our core competencies and drive structural operational efficiencies.

“This provides a clear path to increasing shareholder value as we build on our leadership positions with a stronger revenue and profit growth profile.”

IGT also published results for the fourth quarter of 2020, during which revenue was down 15.2% to $885.0m. Global lottery revenue climbed 10.9% to $630.0m, but global gaming revenue almost halved from $476.0m to $255.0m.

Operating expenses were reduced by 21.3% to $789.0m, leaving an operating profit of $96.1m, up 137.9% year-on-year. However, adjusted EBTIDA declined 19.2% to $295.0m.

Non-operating expenses were up 23.3% to $255.3m, resulting in a $159.1m loss before tax, compared to $166.7m in Q4 of 2019. After paying $72.7m in tax, IGT posted a $231.9m loss from continuing operations.

Taking into account $11.8m in profit from discontinued operations, this left a net loss of $220.1m, wider than the $138.4m loss in Q4 last year. IGT also accounted for a $23.8m loss attributable to non-controlling interests from continuing operations, meaning it ended Q4 with a total net loss of $242.0m, compared to $167.7m in 2019.