Scientific Games Corporation has published its results for the fourth quarter and year ended December 31, 2019. Hindered by fewer Canadian systems launches and slower machine unit sales, the firm posted Q4 revenue of $863m compared to $886m year-on-year.
Net loss for the quarter was $37m versus a net income of $207m in Q4 2018 and included a $40m loss on a notes offering-related debt financing transaction alongside a $12m loss on remeasurement of Euro denominated debt.
The prior year included a $183m reversal of a reserve related to resolving the Shuffle Tech legal matter and a $14m gain on remeasurement of Euro denominated debt.
Consolidated adjusted EBITDA was also down at $328m compared to $343m year-on-year driven by lower Lottery and Gaming AEBITDA. That figure was partially offset by Digital AEBITDA of $21m, representing a 75% increase.
The company said it remains committed to deleveraging its balance sheet targeting to be at 6x or below by the end of 2020, 5.5x in 2021 and continuing to reduce beyond those levels into the future.
Turning to SG’s full year 2019 results, revenue increased $37m to $3.4bn in 2018. Net loss stood at $118m, an improvement of $234m. Consolidated AEBITDA increased to $1,334m from $1,330m in the prior year, driven by growth in the firm’s Lottery, SciPlay and Digital segments largely offset by Gaming.
CEO and President Barry Cottle told investors: “This past year, we made great strides in developing the best games, attracting industry leading talent, and improving our capital structure.
“I’m confident we have the right team in place to reach our goal to be the market leader across land-based gaming, lottery, sports and digital gaming driven by leading content and the platforms that enable play anywhere and anytime. Our recent contract and deal wins across our businesses, and the globe, highlight that we are on the right path.”
CFO Michael Quartieri added: “We reduced our net debt by over $460m in 2019, while successfully completing two refinancing transactions that will significantly reduce our cash interest costs going forward and extended our maturities. Our overarching commitment remains delevering through organic growth, new market opportunities, and driving further enhancements to our free cash flow.”
Expanding on the key developments in Q4 2019, SG noted a flat performance in gaming operations, specifically its installed base of US and Canadian machines. Gaming machine sales also suffered, with total new unit shipments in the US and Canada decreased due to lower replacement units.
More positively, table games continued to grow, increasing 8% from the prior year period to $65m, while lottery systems saw revenue rise $4m due to increased sales of the firm’s hardware solutions, primarily in international markets.
SciPlay mobile penetration, meanwhile, increased 300 basis points to 84%. AEBITDA grew by 33% to $32m and ARPDAU rose 9% to $0.50. Digital AEBITDA increased by 75% ($9m) from the prior year.
On other highlights, the Q4 report stated: “We have been selected by Flutter Entertainment to provide the sports betting platform for FanDuel, the market leading sports betting operator in the US. We are also pleased to announce the extension of our partnerships with William Hill and GVC Holdings.”