Australian gaming machine manufacturer Ainsworth Game Technology Limited (AGT) has released its financial results for the first half of 2024, reporting a decline in key financial metrics, including in APAC, Latin America and Europe.
Revenue for the six months ending June 30, 2024, was AU$121.4 million ($82.0 million), down 15 percent from the AU$143.6 million ($97.0 million) recorded in the first half of 2023.
Underlying EBITDA for 1H24 was AU$26.8 million ($18.1 million), representing an 8.8 percent decline compared to AU$29.4 million ($19.9 million) in H1 2023.
Profit before tax, excluding currency impacts and one-off items, came in at AU$14.3 million ($9.7 million), down sharply by 39 percent from AU$23.3 million ($15.7 million) in the corresponding period of 2023.
AGT noted that international revenue, which makes up 86 percent of the company’s total revenue, fell by 17 percent year-on-year to AU$104.7 million ($70.8 million).
AGT’s Asia-Pacific segment remained afloat amid competitive market conditions, with revenue dropping by 10 percent to AU$19.1 million ($12.9 million) in 1H24 compared to AU$21.2 million ($14.3 million) in the prior corresponding period. Nevertheless, the company saw improved profitability in this region, with segment profit rising to AU$1.6 million ($1.1 million) from a loss of AU$0.2 million ($0.14 million) in 1H23. AGT attributes this improvement to cost containment measures and better gross margins.
Latin America and Europe struggled in 1H24, with revenue down 36 percent to AU$29.3 million ($19.8 million), compared to the same period in 2023. This was largely due to changes in import regulations in Argentina and Mexico, which hindered sales.
In contrast, North America fared better, maintaining relatively stable revenue at AU$67.9 million ($45.9 million), down slightly from AU$68.5 million ($46.3 million) in the first half of 2023. The strong performance of high-denomination games and the introduction of the A-Star Raptor cabinet in the US market have bolstered the region’s performance.
Ainsworth also reported that recurring revenues from historical horse racing (HHR) and connected fees increased to AU$48.9 million ($33 million), a 3 percent increase from the previous year, demonstrating the stability of its recurring revenue streams.
Despite the challenges, AGT is optimistic about future growth. The company continues to develop and release new gaming products, which are expected to drive further revenue opportunities in the second half of 2024.
Chairman Danny Gladstone expressed confidence in AGT’s investment strategy, stating, “These investments are expected to further establish the necessary foundations to enable the development and release of new and innovative products to achieve improvements in the Group’s financial results.”
In addition to new product launches, AGT has secured an extension of its exclusivity agreement for VLT (video lottery terminal) products in Montana for another three years, which will provide further revenue opportunities through cabinet and software purchases in the latter half of the year.
AGT’s online segment reported revenue of AU$5.1 million ($3.4 million), down from AU$8.4 million ($5.7 million) in H1 2023. This drop reflected the termination of the company’s exclusivity agreement with GameAccount Network (GAN) in March 2024. However, AGT remains committed to expanding its online presence through direct integrations with operators in North America and Latin America.
The company’s focus on research and development (R&D) continues to grow, with expenses up by 18 percent compared to the previous year. R&D accounted for 21 percent of AGT’s total revenue in H1 2024, with the company stating it continues to innovate in order to remain competitive in the global gaming market.
“As we secure the remaining approvals of the A-Star Raptor across additional jurisdictions, in conjunction with the progressive release of newly developed gaming titles, we expect the second half to provide increased revenue opportunities”, CEO Harald Neumann added.
