IGT Financial Outlook Improves with Deals in China
International Gaming Technology (IGT) is one of the largest providers of casino gaming technology. Their success is mainly in the casino industry, as they provide high-quality slot machines for many casinos across the world. IGT recently took a hit with a net loss of $290m in the second quarter of the year. $220m of that loss came from their net foreign exchange losses. While their operating income increased by 12% since last year’s numbers, their adjusted operating income declined 9% to $264m. IGT collected a revenue of $1.22bn which isn’t too shabby, but it is still down 5% since last year when revenue hit $1.29bn.
Despite these losses, the CEO, Mr. Marco Sala remains confident about the rest of the year. His positivity may be high because IGT has managed to cut their net debt by 11%. Mr. Sala mentioned that the second quarter’s results showed strong performance indicators for their gaming business as well as their global lottery business. He is also expecting higher profit levels throughout the second half of the year as demand increases shown by increases in the sales of gaming machines and selling prices.
The chief financial officer for IGT also mentioned how the company had made a lot of progress. CFO, Mr. Alberto Fornaro included that lowering IGT’s debt as well as enhancing their cash generation shows a healthy future for the company. All the while, IGT has recently expanded by starting a new lottery business in China with the help of a Telling Telecommunication Holding Co. subsidiary. For this new venture, they will also be partnering with Shenzhen Tian Lian Cai Investment Co. Through this partnership, IGT will then be providing products to lottery centers all over China. They will undergo many licensing processes, and hopefully will be ready for business by the third quarter of 2017 after they have gained approval for all of the needed permits.
Chief Executive International, Mr. Walter Bungo weighed in saying that he expects this new venture to be very fruitful for IGT due to the growth of the lottery industry in China and the positioning of IGT’s new branch. Telling Telecommunications Holding Co. will hold the majority of the stake in this new venture at 51% while IGT will own the other 49%. Mr. Huang Shaowen, chairman of Telling, added that IGT and Telling would be able to bring the “most advanced technology, games, and operational business practices to China” by working together and helping to grow the lottery industry as well as contribute to China’s overall social welfare.