The second quarter of 2020 was understandably poor for Scientific Games Corp (Sci Games), with the ongoing effects of Covid-19 cutting into their bottom line, but they remain optimistic. In a July 23 results announcement that was promoted as “better than expected”, the company reported a loss of $198 million for the period of April 1 to June 30.
That represents a pretty far fall from the $75 million shortfall in the same period for 2019, thanks to a 36.2% decline in revenue to $539 million. But they saw a 41% increase in online gambling revenue, rising to $166 million. That part of the company had an 80% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) to $60 million. Overall, the company kept a positive Adjusted EBITDA of $121 million.
The digital segment of the company also saw growth to help that number, rising 6% to $73 million, with adjusted EBITDA of 67% for $20 million. Overall, gaming revenue fell 79% to $91 million, and lottery revenue fell 10% to $209 million.
“I’m very proud of how we are navigating the current environment, as evidenced by our strong cost containment and cash management, which allowed us to deliver better than expected cash flow for the quarter,” said Barry Cottle, President and Chief Executive Officer of Sci Games. “This is a testament to our team’s ability to effectively manage our business in the short term and maintain our strong customer relationships so we are set up for success as the economy begins to reopen.”
“The diversity of our businesses and our position on the forefront of digital gaming were critical to allow us to successfully navigate the worst of this environment,” he added. “We have the right team coupled with the best products across both land-based and mobile gaming to position us for future growth.”
A little over a week ago, Sci Games Chairman Ronald Perelman made news by announcing he was looking to sell his 39% stake in the company. Coming only a little over a year after he spent $4.6 million to increase his shares in the company, the move looks like a vote of no-confidence in the direction Sci Games is going in, now that it’s mired in a pandemic.
But with the company promoting its online success and still positive EBITDA, Perelman’s emphasis that he’s looking to sell at the right price, and not for the first offer he gets, makes a lot more sense. Maybe when share prices climb a little more and the company is looking stronger, he’ll be ready to let go.
