The global COVID pandemic has hit International Game Technology hard, as evidenced by its Q2 trading update for the period ended June 30. Consolidated revenue, operating income and global gaming all showed decline, as did lottery sales due to limited footfall.
Looking at the figures in greater detail, consolidated revenue came in at $637m, down 48% from the prior year, while global gaming revenue declined 72%, driven by the closure of casinos and gaming halls, fewer unit shipments, and lower systems and software sales compared to the prior year.
Global lottery revenue was down 26% on reduced traffic to points of sale and temporary game shutdowns in Italy, although the firm cited an improvement in gaming and lottery trends each month as venues re-opened and restrictions eased.
IGT’s operating loss of $94m, down from income of $224m year-on-year, was driven by reduced business volumes and included a $43m restructuring expense. Net loss attributable to the firm was $280m, shrinking to $121m after adjustment versus a net income of $91m in the prior year.
Adjusted EBITDA was also down at $168, versus $454m year-on-year. Net debt of $7.29bn did, however, improve by $93m from $7.38bn at December 31, 2019.
CEO Marco Sala told investors: “Our second quarter results reflect the intense impact of global lockdowns caused by the pandemic. That said, thanks to strong North America Lottery performance and our swift adoption of cost-saving and avoidance measures, we delivered better cash flow than we expected back in May.
“Our resilience is a direct consequence of the diversity of our global portfolio of products and solutions. The improving trends we are currently seeing are encouraging, but we remain prudent with our planning. Our new organizational structure enhances our readiness to adapt to changes in market conditions.”
CFO Max Chiara commented: “Cash generation and liquidity remain our top financial priority. The proactive efficiency initiatives and focused capital markets activity we executed in the quarter have us tracking ahead of plan on all key measures and we expect to deliver positive free cash flow this fiscal year.
“We have the resources we need to navigate the impact COVID-19 is having on our business and we are making important, strategic decisions to enhance our operational flexibility. This includes over $200m in structural and discretionary cost savings compared to pre-pandemic levels.”