SG feels $198m COVID impact

Scientific Games Corporation (SGC) has published its Q2 trading statement, underlining that COVID-19 has impacted all core business channels including lotteries, as the company posted a net operating loss of $198m.

As previously communicated to markets, the Nasdaq technology group stated that pandemic disruptions ‘affected comparability to previous trading periods’, as group Q2 revenues dropped from $845m in Q2 2019 to $539m.

Noting the severe implications of temporary closures of casino operations globally and a lower level of lottery ticket sales, SGC EBITDA felt the full impact of COVID-19 as figures declined to $121m compared to $335m in Q2 2019.

Regarding lottery revenues, the group posted a 10% decline from $231m in Q2 2019 to $209m, with AEBITDA for the vertical also dropping by 6% from $103m down to $97m.

With this being said, the group has recorded a 20% increase in lottery ticket sales for instant game retail sales in the most recent four-week period compared to the same period last year.

Barry Cottle, President and Chief Executive Officer of Scientific Games, stated: “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.”

The biggest impact however was felt by SGC’s gaming division which noted a 79% decrease, registering revenue figures of $91m compared to Q2 2019’s $427m.

Despite this, the group has since expressed hope in an uptick in gaming for the rest of the year, with 85% of casinos having reopened as of July 23.