SGC Q2 results marred by disruptions from COVID-19

Temporary casino closures coupled with continuing COVID-19 disturbances impeded the efficiency of Scientific Games Corporation during Q2 2020, with the gaming division of the company taking the biggest hit.

In releasing its Q2 financial statement, SGC emphasised that the continuing COVID-19 disturbances had ‘affected comparability to previous trading periods’ as the company announced a net operating loss of $198 million.

Revenues for Q2 2020 fell from $845 million in Q2 2019 to $539 million, with SGC ‘s gaming division most badly affected over the period.

SGC posted gaming revenues of $91 million over the three months ended June 30, 2020, down 79 percent from $427 million in the same period last year. With casinos beginning to reopen across the US, SGC expressed optimism that in the latter half of the year, gaming revenues will pick up.

Noting the significant consequences of global temporary suspensions of casino operations and a lower level of lottery ticket revenue, group-wide EBITDA amounted to $121 million , down from $335 million in Q2 of 2019.

The results have been ‘impacted by a $33 million Gaming segment charge related to  receivables credit allowances and charges for inventory valuation, ‘ according to SGC.

However, during the trading period, SGC praised the success of SciPlay and its Digital business units which sustained growth during Q2 trading.

A review of SciPlay figures saw AEBITDA rise by 80 percent from the previous year to $60 million, due to ‘increased game health driven by recently implemented game updates and features to maximise player engagement and the ‘stay at home’ dynamic related to COVID-19′. While, Electronic AEBITDA rose to $20 million by 67 percent.

Barry Cottle, Scientific Games President & Chief Executive Officer said: “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.”

According to SGC, net cash outflow was reported to be ‘better than prior expectations of approximately $70 million to $90 million,’ as the company announced $16 million in figures. Net cash produced by operating activities has meanwhile been $52 million , compared to $95 million in Q2 2019.

SGC reported net losses of $198 million, dramatically higher than the $75 million reported in last year’s equivalent era, which it attributes once again to ‘lower revenue and COVID-19 impacts.’