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Scientific Games sees revenue rise and losses shorten in first half


Scientific Games has reported a year-on-year increase in revenue for the first six months of 2019, while the supplier was also able to halve its net loss for the period.

Revenue for the six months to June 30 amounted to $1.68bn (£1.38bn/€1.52bn), up from $1.66bn in the corresponding period last year.

The solutions giant noted an increase in services revenue, which climbed from $876m to $916m, but product sales slipped from $481m to $476m, and instant products from $300m to $290m.

The supplier complemented this revenue rise by cutting operating costs from $1.51bn to $1.43bn, with the cost of services down from $246m to $268, and depreciation, amortisation and impairments dipping from $361m to $335m.

Scientific did spend more in other areas, with the cost of product sales up from $226m to $218m and selling, general and administrative expenses rising from $346m to $360m.

However, overall spending was down in the period and, when coupled with the increase in revenue, Scientific was able to cut net loss from $208m to $99m. Net loss before tax was also down from $202m in the first half of 2018 to $88m this year.

First-half growth comes despite Scientific not seeing such positive figures for the second quarter, with revenue for the three months to June 30 remaining level at $845m.

Gaming revenue dipped 9% year-on-year from $471m to $427m, with Scientific putting this partly down to the cut in the maximum stake on fixed-odds betting terminals in the UK market.

However, there was better news for other parts of the business, with lotteries revenue rising by 12% to $231m and digital revenue increasing 3% to $69m. Revenue from the SciPlay social gaming arm was also up 18% year-on-year to $118m.

Although Scientific was able to cut total operating expenses from $746m to $717m in the quarter, net loss widened from $6m to $75m, primarily due to a $75m payment related to the extension of its instant ticket concession in Italy.

Reflecting on the results, president and chief executive, Barry Cottle, focused on growth across the lottery, digital and SciPlay social gaming businesses, adding that the supplier is continuing to stabilise its gaming operations, driven by the successful launches of several new games.

“The second quarter really highlights the diversity of our business and the many avenues we have to generate revenue across the globe,” Cottle said. “The entire organisation is laser focused on strengthening our core business and capturing market share in emerging digital markets while making our business more efficient.

“These key focus areas will allow us to deliver the greatest returns for our stakeholders, set ourselves up for profitable growth, and generate significant cash flow to continue on our deleveraging path.”