Scientific Games Corporation (SGC) has recorded a net operating loss of $198m in its 2020 Q2 trading update, citing the impact of COVID-19 across its core business channels with gaming being particularly badly affected. The group’s Q2 revenues dropped from $845m in Q2 2019 to $539m.
The blight on trading, thanks in part to enforced casino closures and dwindling lottery sales, had an inevitable effect on the firm’s EBITDA which tumbled to $121m versus $335m year-on-year. Also contributing to a dismal set of results was a $33m gaming segment charge related to receivables, credit allowances and charges for inventory valuation.
Gaming was most severely impacted, showing a 79% drop in Q2 2020 revenue to $91m compared with $427m year-on-year. Lottery revenues, meanwhile, experienced a 10% decline from $231m in Q2 2019 to $209m. AEBITDA dropped by 6% from $103m down to $97m.
More encouragingly on the lottery front, the group recorded a 20% increase in instant game retail sales during the most recent four-week period compared to the same period in 2019.
Despite facing global headwinds, SGC praised the performance of SciPlay and its Digital business units, which maintained growth during Q2 trading.
A breakdown of SciPlay figures saw AEBITDA increase by 80% from the prior year to $60m, attributed to ‘increased game health driven by recently implemented game updates and features to maximize player engagement and the “stay at home” dynamic related to COVID-19’. Meanwhile Digital AEBITDA increased by 67% to $20m.
Barry Cottle, President and CEO, told investors: “I am very proud of how we are navigating the current environment, as evidenced by our strong cost containment and cash management, which allowed us to deliver better than expected cash flow for the quarter.
“This is a testament to our team’s ability to effectively manage our business in the short term and maintain our strong customer relationships so we are set up for success as the economy begins to reopen. The diversity of our businesses and our position on the forefront of digital gaming were critical to allow us to successfully navigate the worst of this environment.
“We have the right team coupled with the best products across both land-based and mobile gaming to position us for future growth.”