The COVID-19-related lockdowns sent International Game Technology’s Q1 revenues down by 18 per cent to $940m as the ‘global closure of casinos and gaming halls and widespread mobility restrictions significantly hinder service revenue generation.’
The slot giant reported a loss of $248m but highlighted its $2.2bn in liquidity. It said it has implemented a ‘robust business continuity plans with cost reduction and capital spending avoidance initiatives to target $500m in savings for 2020.’
“After a solid start in the first two months of the year, we quickly shifted our focus to the global COVID-19 health crisis in March,” said Marco Sala, CEO of IGT. “The safety and well-being of our people, customers, and communities have been our highest priority since day one. We implemented robust business continuity plans and maintain service levels at our normal, high standards. I am grateful for the passion and perseverance the entire IGT team has demonstrated during these unprecedented times and I am confident IGT is well positioned to emerge from the crisis a stronger, even more competitive organisation.”
“We’ve taken swift actions across all non-essential costs and are now switching our focus to structural cost savings initiatives. At the same time, we have adopted strict measures to preserve liquidity in the current environment,” said Max Chiara, CFO of IGT. “Given the uncertainty created by COVID-19, we are withdrawing our previous financial outlook for 2020, but we are confident that with $2.2bn of liquidity, we are geared with sound financial flexibility to weather the storm caused by the COVID-19 pandemic.”
Mr. Sala added: “Our focus shifted radically as COVID-19 turned into a global pandemic late in the period. Our business was off to a good start in January and February building on the momentum we had coming out of 2019. Lottery same-store revenues for instant tickets and draw games were up mid-single digit. Replacement unit shipments of gaming machines increased over 30 per cent and installed base use were strong. But since late February, when the virus began to have serious impact on Italy, the safety and well-being of our people, our customers and communities all over the world became our top priority.
“The entire organisation is focused on cash flow generation and cash preservation,” he added. “With $2.2bn in liquidity at the end of Q1, we are confident we have sufficient flexibility to weather the pandemic and we achieved a major milestone regarding our bank facilities last week securing a period of relief and additional flexibility on our financial covenants. All our actions are focused on providing the flexibility to manage through and be well prepared for operating in this new normal.”
Caption: IGT’s Marco Sala