Ainsworth US$40mln half-year loss on impairment charge

Ainsworth US$40mln half-year loss on impairment charge

Ainsworth Game Technology Ltd reported a loss after tax of AUD50.1 million (US$39.9 million) for the six months to December 31, compared to AUD4.0-million profit a year earlier. The latest result includes “one-off impairment charges” of AUD29.2 million, “primarily due to the recent deterioration in the group’s Latin America business,” stated the gaming supplier in a Thursday filing to the Australian Securities Exchange.

The half-year results also include a currency-exchange loss of approximately AUD13 million due to the strengthening of the Australian dollar against the U.S. dollar, said Ainsworth Game.

“Excluding currency impacts and impairment charges… the loss before tax was AUD14 million in the current period,” it added.

Revenue for the six months to December 31 was AUD72.1 million, down 32.8 percent from the prior-year period. The result was a 71-percent improvement from the first half of calendar year 2020, stated the company.

In Thursday’s filing, Ainsworth Game said its international sales contributed 73.3 percent to the group’s aggregate revenue in the reporting period.

The company reported underlying adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of AUD5.8 million. Such result excluded the non-cash impairment charges, and included AUD4.5 million in “government pandemic subsidies and concessions” granted during the reporting period. Accounting for those items, the group’s reported EBITDA was negative to the tune of AUD36.8 million.

Despite seeing slight improvements in some of the markets in which the firm operates, Ainsworth Game said revenues in the Latin America segment “were severely impacted by the effects of Covid-19,” down 85 percent from the prior-year period.

The company said it had “re-evaluated” the impacts on the group’s revenue from the “uncertainties” in the Latin America market. “Given the revised outlook, Ainsworth Game prudently decided to record AUD27 million one-off non-cash impairment charges relating to the Latin American business unit,” it stated.

Ainsworth Game said earlier this month it had a new five-year secured-credit facility worth US$35.0 million, provided by United States-based lender Western Alliance Bancorp. Proceeds of US$28 million from this new facility were used “to extinguish all company obligations under the prior revolving credit facility” with Australia and New Zealand Banking Group Ltd, said the firm.

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