IGT Q2 results saw the firm tighten its revenue and earning forecasts for fiscal year 2022 after its global lottery division suffered year-on-year dips in turnover, leading to group-wide stagnation.
Publishing its financial results for Q2, IGT recorded total group revenue of $1.02bn, down 2% YoY from 2021’s $1.04bn.
Global Lottery declines stain IGT Q2 results
This decline was primarily driven by the decreasing revenue from its Global Lottery division, which posted downturns of 11% to $648m, down from $725m in Q2 of 2021.
IGT attributed this to a comparative period that profited from ‘$70m in prior-year benefits primarily from the closure of gaming halls in Italy.’
Similarly, the global lottery’s operating income was down 23% to $230m, attributed to around $60m of income related to those same prior year benefits.
Global gaming uplifts
The lottery business’s headwinds were offset by the strong performance of IGT’s Global Gaming division, which has experienced a strong period of growth in the US and Canada, especially looking ahead to the H2 integration of iSoftBet.
Global Gaming generated $330m in revenue during Q2, up 21% YoY, boosted by North American growth, higher average selling prices and increased installed base yields.
Meanwhile, the digital and betting arm posted revenue of $43m, remaining stable with the previous year, with icasino growth in the US offset by poor performance in other markets. IGT also noted that the North American sports betting market GGR was adversely impacted by ‘lower hold levels’.
Away from day-to-day operations, the IGT Q2 results highlighted a $150m non-operating expense that has been reserved for the ‘likely loss of the ongoing litigation’ made against its former subsidiary, Double Down Interactive.
Profits dented by 7% but Chiara remains positive
Q2 struggles saw IGT register a 7% drop in EBITDA to $409m, down from $442m one year ago. Meanwhile, operating income was declared at $228m – reflecting a further 7% decline on 2021 bottom-line results of $244m.
Despite this, the group’s senior leadership remained upbeat about the trading period and the future, noting that it remains on target to hit its full-year objectives.
“Our first half results set us firmly on the path to achieving our 2022 financial targets,” said Max Chiara, CFO of IGT. “Rigor on costs and incremental revenue opportunities allow us to maintain our full-year operating income margin outlook despite unfavorable currency movements and macroeconomic challenges.
“At the same time, we are returning significant capital to shareholders via dividends and share repurchases.”
Looking ahead and cash balance
Following its Q2 trading update, IGT tightened its revenue forecasts by $100m to a target of $4.1-to-$4.2bn, owing to changes in global currency rates and impacts of the divestment of its Italian B2C business.
Furthermore, the firm is adamant in its confidence in delivering $850-to-$950m in earnings and plans to reward investors with $135m deployed for cash dividends and share repurchases.
Concluding its IGT Q2 results update, the firm declared total liquidity of $2.1bn, with $0.7bn in cash and a further $1.5bn in borrowing capabilities. Finally, the board noted that a cash dividend of $0.20 per common share will be issued to shareholders.
“Strong customer and player demand for IGT’s products and solutions drove some of our strongest profit results ever in the second quarter and the first half of the year,” said Vince Sadusky, CEO of IGT.
“Our business profile is supported by significant recurring revenue streams backed by long-term contracts and resilient end markets, providing a solid foundation on which to grow.
“We are laser-focused on executing our strategic objectives and creating compelling value for our stakeholders.”