Ainsworth Game Technology Ltd, a slot machine manufacturer, expects its second-half profit before tax to fall sequentially despite an increase in sales.
The Australian-listed company said it expected profit before tax for the six months ending December 31 to be between AUD8 million (US$5.2 million) and AUD10 million, excluding currency exchange impacts and one-time items. That compares to the AUD14-million profit made in the first half of this year.
Revenue from July to December is expected to “show an estimated growth of 12 percent” over the AUD121.4 million reported in the six months to June 30, according to Ainsworth in a Wednesday filing.
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According to the corporation, the projection was “based on preliminary management forecasts, subject to period end closure and audit procedures”.
“These results reflect the positive momentum achieved across the business,” the company told investors.
The report continued: “All geographical regions experienced solid growth in the period apart from the digital segment which suffered an initial decline following the reduced contributions from Game Account Network Ltd (GAN), following the acceleration of revenue arising from the termination of exclusivity arrangements reflected in the first half of calendar year 2024.”
However, Ainsworth stated that gross margins were “negatively impacted” as compared to the first half of 2024, “which was the primary factor contributing to the lower profitability experienced in the period”.
The firm forecasts the full-year 2024 gross margin to be “approximately 62 percent,” compared to the reported margin of around 67 percent in the first half of this year.
“The forecasted margin has been adversely affected by a range of factors, including product mix of products sold within Latin America, competitive market conditions and the under recovery of production variances expensed in the current period,” said the supplier of casino games.
According to the announcement, Ainsworth’s CEO, Harald Neumann, stated, “I am encouraged by the growth in revenue during the period and expect growth to continue in the coming periods as we release the next suite of game offerings across our global markets.”
Mr Neumann stated that the company’s measures were resulting in “progressive improvements in game performance” in the markets where it operates.
“Additional game releases and hardware initiatives are expected to maintain the growth experienced in coming periods,” said the company’s CEO.
In Tuesday’s filing, Ainsworth also stated that it had “experienced a cybersecurity incident,” which was “currently being investigated and assessed.”
“Despite some disruptions experienced in internal business systems and operations, through cautionary measures implemented, it is currently not expected that this incident will have any material adverse impact on the forecasted results” for this year’s second half, the company stated.
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