Global gaming products manufacturer Ainsworth Game Technology (AGT) released today its audited earnings report for the fiscal year 2021, ended June 30, 2021, showing a pre-tax loss of AU$59.2 million ($43.2 million).
Ainsworth Takes A Loss
More than 70% of the reported loss, AU$41.7 million ($30.4 million), was due to one-off non-cash impairment cost of asset value write-downs, prompted by current uncertainties and risks associated with forecasted cash flows, with another 19%, or AU$11.5 million ($8.4 million) stemming from unfavorable currency exchange rates.
The FY2021 loss comprised of AU$56.6 million ($41.3 million) of loss in H1 and just AU$2.6 million ($1.9 million) in H2, outlining the huge improvement achieved in the second half of the fiscal year. Excluding the one-off currency and impairment impacts, FY2021 loss was AU$17.1 million ($12.5 million), equivalent to FY2020 AU$34 million ($24.8 million) on a similar basis.
FY2021’s operating loss exceeded AU$43 million ($31.4 million) before tax in FY2020, despite the increase in revenues of 7% to AU$159.5 million ($116.4 million). This was comprised of gains in North America and Australia offsetting a huge decrease in Latin America.
Revenues on the Upswing
Second half revenues showed an increase of 21% on a sequential basis, domestic markets showing consistency between first and second half readings and an increase of 125% compared to the previous reporting period, which registered only AU$8.8 million ($6.4 million). In total, AGT sold 625 machines in FY202, of which 59% were reconditioned units.
AGT noted international markets generated AU$120.5 million ($88 million) in FY2021, of which AU$67.6 million ($49.3 million) in the second half that painted an increase of 28% on a sequential basis.
International markets contributed to 76% of total revenue as AGT’s units under gaming operation increased to 7,052, up 9%, stirring growth for recurring revenue, which accounted for 28% of total revenues.
Spearheading revenue from international markets was North America with AU$88.5 million ($64.6 million), posting an increase of 23% as the re-opening of most markets drove a strong recovery of customer activity.
Participation and lease revenue jumped by 66% compared to pandemic-struck FY2020, as assets on participation increased by17% to 2,712. The increase led to a higher portion of overall regional revenue of 44%, compared to 32% in the year prior.
A solid recovery in Australia saw AGT register an increase in revenue of 38%, as customers use current uncertainties to boost their marketplace competitiveness by further investing in their gaming floors. All Australian states but Victoria posted growth in FY2021 revenue.
In Latin America, mandates closures and access restrictions to establishments in Mexico, Argentina and Peru significantly impacted revenues, which sunk 56% to AU$18.3 million ($13.4 million) in FY2021.
Following the launch of real-money gaming in New Jersey, AGT reached a 28% growth in online gaming revenue year-over-year, having gone live with seven operators and then entering into an exclusive agreement with GAN that will ensure growth in the years to come.
EBITDA Swings Higher
FY2021 adjusted EBITDA came out at AU$15.5 million ($11.3 million), nearly triple AU$5.8 million ($4.2 million) in FY2020, while gross margin decreased from 61% in the previous reporting period to 56%, primarily due to a write-down of older style cabinets and higher production overhead costs.
Operating costs fell by 20% to AU$98.4 million ($71.8 million) after implementing measures such as rental concessions, voluntary employee salary reductions and receipt of government subsidies. Overhead savings were also achieved via the implementation of headcount reductions by the end of FY2020.
As of June 30, 2021, AGT had a cash balance of AU$42.4 million ($31 million), which increased further after the period close, with the initial $5-million GAN contribution as per the agreement between the two entities.