Challenges and Strategic Moves in Ainsworth Game Technology’s H2 Financial Performance
Overview of Ainsworth Game Technology’s H2 Results
Ainsworth Game Technology (ATG), a company specializing in slot machine manufacturing in Australia, has released its preliminary financial report for the second half of the year, revealing a mixed performance. Despite facing significant challenges, the company remains optimistic about its future prospects.
Decline in North American Profitability
ATG forecasts a profit before tax of AUD 21.5 million (approximately USD 14.3 million) for the second half, which represents a decline compared to the AUD 23.2 million posted in the same period last year. Although the company anticipates a 9% growth in total annual revenue, the revenue for the second half is expected to fall by up to 11% from AUD 152.1 million recorded in the previous year.
The company also anticipates its half-year profit to drop sharply to AUD 7.6 million (around USD 5 million), down from AUD 13.9 million in the first half. This reduction is mainly due to challenges encountered in the North American market, where revenue is projected to decrease by as much as 20% compared to the first half of the year, impacted by fewer installed units, lower unit yields, and reduced unit sales.
In contrast, ATG’s performance in the Asia-Pacific region remained steady, while Latin America showed modest revenue growth during the same period.
These preliminary figures, subject to audit and finalization, underline significant hurdles confronting the company.
Financial Strategy and Future Initiatives
Separately, Novomatic, the majority stakeholder in ATG, was unsuccessful in its bid to purchase the remaining shares and privatize the company for the second time this year, facing resistance from other major shareholders including the Ainsworth family.
In response to financial needs, ATG has announced it will leverage its secured bank loan facility with Western Alliance Bancorporation to cover short-term working capital. At the same time, the company intends to maintain its focus on research and development, which is projected to constitute 17.5% of total revenue this year, underscoring ATG’s commitment to innovation despite current financial pressures.
