Australian gaming manufacturer Aristocrat Leisure has reported a significant drop in its half-year profits.
The Market Herald reports that after its operations took a hit from the coronavirus pandemic, the company’s revenue for the six months ending March 31 dropped to around $2.23 billion.
However, after-tax profit fell 73.5 per cent to $346.5 million compared to more than $1.3 billion last year.
The drop was partly due to a 31.4 per cent slide in operating cash flow, which fell from $620 million to $425.1 million after several strategic investments were made to support customer recovery.
Still, Aristocrat Leisure said its portfolio of digital and gaming assets continued to grow over the period, with around 80 per cent of its revenue driven from recurring sources.
Roughly 10.9 per cent of the company’s revenue, or $242.7 million, was put towards game design and development as part of its “refreshed growth strategy and unrelenting commitment to exceptional market-leading product portfolios.”
Notably, Aristocrat saw a 44 per cent jump in purchases for online activities as sweeping lockdown measures kept people at home.
Like many gaming and entertainment companies, Aristocrat Leisure has so far stood down 1000 workers, cut 200 jobs and transferred another 200 full-time positions to part-time roles.
“We expect uncertain and volatile conditions to continue near term and we are closely monitoring key factors including customer sentiment and gaming venue patronage,” managing director Trevor Croker said.
“Nevertheless, we enter the second half of fiscal 2021 with excellent momentum, resilience and confidence with a strong balance sheet to continue to invest organically to grow share and accelerate growth through M&A in line with our rigorous criteria.”
Online gaming jumps as pandemic took hold
The gaming giant also announced a 28.9 per cent jump in player purchases for online activities, to March, as lockdowns forced people to stay at home.
The rise was evident in all online offerings, from casino-style games to puzzles and role-playing games.
The nation’s largest manufacturer of gambling machines will issue a 15 cent interim dividend after reporting a 1 per cent decline in revenue last half-year.
Volumes of machine sales were down 10 per cent as the pandemic disrupted purchasing decisions.
Profits in Australia and New Zealand rose 10 per cent to $85.1 million.
Other regions crashed to a loss of US$9.5 million.
For the six months to March 31, online purchases jumped as pandemic lockdowns kept people away from bricks and mortar casinos and gambling venues.
Revenue for the digital segment jumped 28.8 per cent to $895.8 million in the six months to the March quarter.
The company attributed its growth in sales to a $242.7 million investment in game design, development and technology in the first half.
“The results are reflected in the share growth and margin expansion achieved across digital and key gaming segments in the six months to March 31, 2021,” Mr Croker said.
NSW Minister for Digital and Customer Service Victor Dominello said he was encouraged by the industry’s step up and that venues were embracing a cashless gambling technology trial to combat problem gambling and money laundering.
“I support this digital proposal as it is linked to identity, a bank account and with harm minimisation settings,” he said.
“This will help us combat the twin sins of money laundering and problem gambling, addressing the key concerns of the Bergin inquiry.”
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