International Game Technology (IGT) posted a net profit of $92m in the first quarter of its 2021 financial year, after growth within its lottery business drove revenue up 24.7% year-on-year to beyond $1bn.
Total revenue for the three months to March 31 amounted to $1.02bn, up from $814m in the same period last year across its two divisions – global gaming and global lottery.
IGT put this increase down to year-on-year growth in its global lottery segment, where revenue was up 48.3% to $749m. Revenue from operating facilities and management contracts in the lottery business jumped 53.1% to $695m, while other revenue climbed 25.8% to $83m.
Global same-store sales were up by 32.4% overall, with North American and rest of world lottery sales increasing 27.8% and Italy sales 52.2%.
In contrast, global gaming revenue was down 14.2% year-on-year to $266m, as IGT saw a decline in revenue from both gaming services and product sales.
In the gaming service segment, revenue was 4.9% lower at $157m, with terminal revenue down 15.1% to $90m, though systems, software and other revenue increased 11.7% to $86m.
Gaming product sales revenue declined 27.8% to $91m as a 17.0% increase in terminal sales revenue to $62m was offset by a 60.3% drop in other revenue to $29m.
Some 4,405 gaming units were installed during the quarter, up 19.6% up on last year, with US and Canada machine sales up 39.8% at 2,896, and rest of world sales down 6.3% to 1,509.
IGT also revealed an 81.3% year-on-year increase in digital and betting revenue to $58m for the quarter.
Looking at overall geographic performance, US and Canada revenue was 21.2% higher at $542m and Italy revenue 72.3% up at $348, though rest of world revenue dipped 25.3% to $124m.
“Our global lottery segment achieved record same-store sales levels on impressive increases around the world,” IGT chief executive Marco Sala said. “The global gaming segment is demonstrating swift, progressive recovery, including accelerated momentum for digital and betting activities.”
Looking at spending for the quarter and operating costs were reduced by 26.8% to $755m. This was primarily due to IGT having last year faced a $296m goodwill impairment, with no such expense this year.
Operating profit for the quarter stood at $260m, compared to a $218m loss in 2020, while adjusted earnings before interest, tax, depreciation and amortization (EBITDA) increased by 72.4% to $450m.
IGT noted $94m in interest expenses and $25m in other costs, but also benefitted from $145m in foreign exchange gain, resulting in a profit before tax from continuing operations of $287, up from a $248m loss last year.
After paying $148m in tax, this left a profit of $138m, compared to a $247m loss in Q1 of 2020. When including $11m in income from discontinued operations, this pushed profit up to $149m, ahead of the $234m loss last year.
However, IGT also accounted for a $59m loss from non-controlling interests from continuing operations, as well as $2m in income from discontinued operations, which left it with a total net profit of $92m, compared to a $248m loss in 2020.
“We delivered some of our strongest profit results ever during the first quarter, fuelled by robust player demand and significant, structural cost savings,” Sala said. “We expect to return to 2019 levels for key financial metrics this year.”
IGT chief financial officer Max Chiara added: “With the recovery in our business in full swing, we are delivering strong operating leverage which, when coupled with invested capital discipline, drove strong cash flows in the quarter.
“This enabled us to accelerate our debt retirement strategy and gives us confidence in a return to pre-pandemic leverage levels by the end of the current year.”
Publication of the results comes after IGT today also announced it had finalised the sale of its Italian-facing B2C gaming businesses to Gamenet Group, a subsidiary of funds managed by private equity giant Apollo Global Management.
The agreement was worth €950m (£817.2m/$1.16bn), with €725m paid at closing. A further €100m is due on 31 December this year, while the other €125m is payable on 30 September next year.