Scientific Games revenue drops 13% as coronavirus impacts operations
Las Vegas-based supplier implements further cost-saving measures as Q1 net losses reach $155m
Scientific Games has reported a 13% year-on-year fall in Q1 revenue to $725m, down from $837m in Q1 2019, as Covid-19 continues to impact the industry.
The supplier highlighted that “revenue was negatively impacted by the Covid-19 disruptions” that led to the closure of land-based casinos across the world.
Gaming accounted for 44% ($318m) of total revenue in Q1 2020, with lottery making up 29% ($212m) and the company’s SciPlay arm delivering 16% ($118m).
Net losses increased exponentially year-on-year to hit $155m, up from just $24m in the prior corresponding period – again driven by the effect of Covid-19.
Consolidated adjusted EBITDA dropped 39% year-on-year to $200m from $328m, while net cash also fell more than $40m from $167m in Q1 2019 to $120m in Q1 2020.
As coronavirus continues to severely impact operations, the Las Vegas-based business expects implemented cost saving measures to improve Q2 cashflows by over $150m.
These measures include lower capital expenditure, reduced expenditure and workforce-related savings, with the firm noting that it expects the Covid-19 impact to peak in Q2 2020.
In March, the Nasdaq-listed supplier reduced the working hours and pay rate for its workforce to protect the operations of the company, while various support roles were furloughed.
Barry Cottle, Scientific Games president and CEO, said Scientific Games’ “diverse portfolio of assets” would help it “navigate and ultimately excel” when the world resurfaces from the coronavirus pandemic.
Cottle continued: “We are working around the clock to take care of our employees, customers, shareholders and other key stakeholders in these difficult times, while providing uninterrupted products and services to those customers who continue to operate.
“I am confident that the measures we are implementing now will allow us to take advantage of opportunities to strengthen our business and prepare us to come out of the crisis even stronger than before,” he added.
Michael Quartieri, CFO of Scientific Games, commented: “We have made swift and meaningful reductions to our cost structure in response to the current environment. We believe these changes, in conjunction with our available liquidity, provide us the tools to withstand the impact from Covid-19.
“I’m confident that our streamlined cost structure will allow for accelerated cashflow generation and deleveraging in the future,” he concluded.