Ainsworth Game Technology is an Australian based company offering slot machines to casinos. Their net profit for 2017s first quarter is down 50 percent due to a tax adjustment. It is a one-time adjustment, but it has skewed the year’s numbers.
Ainsworth announced Tuesday, February 27, 2018, that the net profit would be $7.6 million instead of $16.14 million due to a tax adjustment. The total revenue for the six month period to December 31, 2017, was also affected showing a profit of $94.3 million, instead of going above $96 million, which was 2016s profit.
The company says the results are the adjustment that occurred in the first half of 2017. The issues come from a reversal of deferred taxes, with regards to foreign currency movement.
Ainsworth stated that revenue growth did occur and was helped by international markets versus domestic sales. Their global growth went up by 2 percent to $65.22 million. The Australian market lost ten percent earning only $29.08 million.
Australia recently changed their views on gambling operations, which may account for the change to domestic earnings.
Ainsworth did not include the cost of sales and financing when talking about their total operating expenses, which are down 8.2 percent. For the earnings, it was AUD 56.3 million. They stated lower admin and R&D expenses account for the savings on their operating expenses.
Danny Gladstone, CEO of Ainsworth Game, stated the results were expected. They expect the second half to show a stronger performance only due to the tax adjustment. The company is predicting that the second half profit will be “modestly” more than the H217 posting of AUD 42.2 million.
Assessing the Year 2018
Ainsworth is hoping for the second half to grow further with new investments in technology. The increase in innovative connect should generate new interest in their machines. They also stated the company would look at more ways to market and make sales to ensure the next half is better.
The second half has excellent momentum, and Ainsworth is going to try breaking into the Americas. They have already gotten some machines in American casinos, but they are hoping to ensure more growth in that direction. They are working to increase their cash flow and earnings, according to Gladstone.
The companies operate on halves with their reports so that the New Year may have a beginning, but the year on year outlook is slightly different than other countries’ company’s projections.