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AGS reduces net loss in year of “transition”

| By Robert Fletcher
Gaming machine provider AGS said a 55.5% year-on-year increase in revenue helped reduce net loss during what it described as a year of “transition” in its 2021 financial year.
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Revenue for the 12 months to 31 December 2021 was $259.7m (£198.8m/€236.7m) up from $167.0m in the previous year.

Breaking this down, AGS said $205.6m of overall revenue was attributable to its gaming operations, with the remaining $54.1m equipment sales.

Operating costs were 13.6% higher at $240.0m, which left an operating profit of $19.7m, compared to a $44.2m loss in the previous year.

AGS also noted $44.4m in interest expense, which, after also including $1.2m in other income, left a pre-tax loss of $24.8m, which was a significant improvement on the $91.3m loss posted in 2020.

AGS received $2.2m in tax benefit, but also reported a negative impact of $984,000 in relation to foreign currency translation, which left a net loss of $23.6m, compared to $88.1m in the previous year.

Shifting attention to the fourth quarter, revenue for the three months to 31 December was 50.6% higher at $70.2m. Some $52.0m of this total was generated through gaming operations, and the other $18.2m equipment sales.

Offering a more in-depth breakdown of performance AGS revealed that revenue from its electronic gaming machine business was 52.1% higher at $64.5m for the quarter, helped by higher-yielding premium games, more consistent core game content execution and a stable gaming macroeconomic backdrop.

Table product revenue increased 25.0% year-on-year to a record $3.2m, helped by ongoing customer demand, while interactive revenue jumped 51.4% to $2.5m.

However, revenue growth was accompanied by a 25.5% rise in operating expenses, but the provider still posted an operating profit of $1.8m, compared to a $7.8m loss in 2020. When excluding certain expenses, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was 51.4% higher at $32.3m.

AGS also reported $11.2m in interest expenses, leading to a pre-tax loss of $9.2m, almost half the $18.1m loss posted in the previous year. After including a $574,000 positive impact of foreign currency translation, this left a net loss of $8.5m, compared to $13.7m in 2020.

“If 2020 was the year of resiliency within our business, 2021 was the year of transition,” AGS president and chief executive David Lopez said. “Supported by the foundational changes put into place over the preceding 18 months and an accommodative macroeconomic backdrop, we were able to establish operating momentum within all three business verticals as we progressed throughout the year, a trend that continued into the fourth quarter.

“With our improved 2021 financial results behind us, our attention has shifted to ensuring we are best positioned to achieve even greater success in 2022. 

“To that end, I would characterise 2022 as a year of acceleration for AGS; one in which we will look to further leverage the continuous improvement in our people, products and processes to strengthen our financial performance.”

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