Tax adjustment slashes Ainsworth fiscal H1 2018 profit

Tax adjustment slashes Ainsworth fiscal H1 2018 profit

Net profit of Australia-listed slot machine supplier Ainsworth Game Technology Ltd plunged by more than 50 percent in the first half of the financial year as a result of a one-time tax adjustment.
In a regulatory filing, Ainsworth announced on Tuesday that the company’s net profit from operations in the first half of fiscal 2018 tumbled to AUD9.7 million (US$7.6 million) from AUD$20.6 million (US$16.14 million) posted in H1 FY17.
On the other hand, Ainsworth’s total revenue for the six months to December 31, 2017, dropped 2 percent to AUD120.3 million ($94.3 million) from AUD$122.7 million ($96.18 million) for the six months to December 31, 2016.
The company attributed the dismal financial result to the one-off adjustment of AUD8.6 million ($6.74 million) in the first half of fiscal year 2017, which reflected “the reversal of previously-recognized deferred taxes resulting from the treatment of foreign currency movements.”
Ainsworth also noted that the revenue growth from international markets was dwarfed by “a weaker domestic performance.” Data showed that Ainsworth’s international arm saw its revenue grow by 2 percent to AUD83.2 million ($65.22 million) in FY18, while its Australian market slid 10 percent to AUD37.1 million ($29.08 million) during the same period.
Excluding cost of sales and financing bill, Ainsworth said that total operating costs fell 8.2 percent to AUD56.3 million, year-on-year due to lower administrative and research and development expenses.
Ainsworth Game CEO Danny Gladstone said the financial results was in line with their expectations, noting that it “provides a solid base for a strong second half performance.”
The company predicts that Ainsworth’s second half profit will be “modestly ahead” of the AUD42.2 million revenue it posted in the same period of fiscal 2017.
To ensure further growth this in the second half, Ainsworth said that it will invest in new technologies and increase their range of innovative content. The company also vowed to intensify their sales and marketing focus.
“We enter the second half with good momentum and we are making continuing progress in growing in the Americas … We expect to increase our units on participation, driving high quality earnings and strong cash flow,” Gladstone said.
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