GGRAsia – GTech 2014 profit slides 52 pct on IGT acquisition costs

GTech 2014 profit slides 52 pct on IGT acquisition costs

Mar 10, 2015 Newsdesk Latest News, Top of the deck, World

Lottery services and gaming equipment firm GTech SpA reported a 52.5 percent decline in net income attributable to the owners in full year 2014.

The firm on Monday reported net income for 2014 of EUR83.3 million (US$90.2 million) compared to EUR175.4 million in 2013. Diluted earnings per share (EPS) for the full-year period were also down 52.5 percent, at EUR0.48, compared to EUR1.01 in 2013.

In the fourth quarter of 2014, GTech reported a EUR92.8 million net loss attributable to the company’s owners, compared to net income of EUR1.3 million in the year-prior period. The diluted loss per share for the fourth quarter was EUR0.54 compared to income of EUR0.01 in the fourth quarter of last year.

The firm said the quarterly loss was “primarily attributable” to factors relating to the firm’s acquisition of Nevada-based slot machine maker International Game Technology (IGT). They included: early redemption of 2016 notes, higher interest expense related to a bridge loan facility, “a higher effective income tax rate primarily related to additional taxation related to the Italian reorganisation,” as well as the “tax settlement and non-deductible costs associated with the IGT acquisition”.

GTech on Monday said the IGT deal is currently expected to close on April 7. It was announced on February 26 that the new company will be branded as IGT, not with the suitor GTech’s name.

GTech’s revenues for the three months to December 31 were up 4.7 percent, to EUR809.5 million compared to EUR773.1 million in the final quarter of 2013.

The company said the revenue increase was principally driven by product sales, which rose to EUR86 million in the quarter from EUR51 million in the fourth quarter of 2013, “chiefly reflecting higher product deliveries in the international and Americas segments”.

“Our underlying operating performance was very solid in the fourth quarter,” said Alberto Fornaro, GTech’s chief financial officer.

“Excluding one-off items primarily related to the IGT acquisition, we achieved or exceeded guidance in all our key full-year metrics: EBITDA [earnings before interest, taxation, depreciation and amortisation], capex [capital expenditure], operating income, and net financial position,” added the executive.

However GTech’s revenue for the full year 2014 was nearly flat, at approximately EUR3.07 billion, compared to EUR3.06 billion in the previous year.

Excluding the one-off items primarily related to the IGT acquisition, net income attributable to the owners for the fourth quarter was EUR53 million; up from EUR29 million. Diluted EPS excluding on-off costs were EUR0.31; up from EUR0.17 last year.