Scientific Games posts stable Q1 opening to overcome Gaming unit headwinds

Scientific Games Corporation (SGC) has reported a stable corporate trading and performance in the first quarter of 2021 as COVID-19 pandemic headwinds continue to impact its business lines.

Publishing its Q1 trading update, SGC registered a 1% increase in group revenues to $729 million (Q12020: $725m) in line with Nasdaq firm’s trading objectives. 

The group’s SciPlay brand and Lottery division experienced the most significant revenue increases at 28% and 17% respectively, with lottery generating the largest section of revenue at $248 million.

Meanwhile, SciPlay saw its earnings increase from $118 million to $151 million whilst Digital revenue experienced a 12% improvement from $77 million to $86 million.

Lottery and SciPlay growth were achieved against the continued downturn of SGC’s gaming unit which recorded a 23% drop in revenues to $244 million (Q12020 $318m) as global COVID casino restriction continued to impact the unit’s commercial pipeline. These COVID limitations also contributed to a 5% decline in revenue from overall group gaming operations.

“I am extremely pleased with our progress this quarter,” said Barry Cottle, President and Chief Executive Officer of Scientific Games. “Despite the continued challenges, our teams’ dedication and focus enabled us to build on our gains from last year. 

“We delivered another strong quarter, enabling us to return to growth on both the top and bottom lines. Our new Gaming strategy and product roadmap continues to have success and our Lottery, SciPlay and Digital businesses delivered strong growth in the quarter. 

“Our results demonstrate the strength of our content and franchises, engaging players on any platform they want to play. The executive team and our Board are continuing to work together and are making great progress as we look to optimize our portfolio, deleverage our balance sheet and capitalize on key areas of growth in order to unlock value for our shareholders.”

Irrespective of its gaming downturn, SGC’s overall net loss was considerably less than 12 months prior at $9 million in comparison to $155 million, attributed by the operator to receivable credit allowances and inventory, in addition to more than $91 million in goodwill impairment charges.

In addition, ‘improved operating results’ contributed to a rise in net cash from operating activities to £123 million, as opposed to £120 million the previous year, whilst SGC also saw its net debt fall significantly by $187 million.

Despite ongoing adjustments, SGC notes that all operating units had delivered an earnings positive outcome, as the technology group registered adjusted EBITDA of $270 million compared to Q1 2020’s $200 million.

Additionally, the company ended the first quarter of the year with an available liquidity of $1.3 billion, bolstered by a $150 million voluntary repayment on SGI’s revolving credit facility.

“The team has really stepped up to make meaningful progress on our key initiatives,” added Michael Eklund, Executive Vice President and Chief Financial Officer of Scientific Games. 

“We remain laser focused on delivering revenue and AEBITDA growth, and strengthening our balance sheet. Our continued focus on operational efficiency is enhancing our cash flows. We are executing at a high level and I could not be more excited about the path forward for Scientific Games.”

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