International Game Technology has continued to struggle in the face of COVID-19 headwinds, with a series of declines felt across the second quarter reflecting “the intense impact of global lockdowns caused by the pandemic”.

Continuing the theme of the firm’s Q1 figures, which saw declines in each business segment and across all primary revenue streams, revenue for the latest quarter plummeted 48 per cent from $1.23bn to $637m.

This was driven by global gaming dropping 72 per cent due to the closure of casinos and gaming halls, fewer unit shipments, and lower systems and software sales compared to the prior year and global lottery revenue falling 26 per cent on reduced traffic to points of sale and temporary game shutdowns in Italy.

It is noted, however, that trends across gaming and lottery improved each month as venues re-opened and restrictions eased.

“Our second quarter results reflect the intense impact of global lockdowns caused by the pandemic,” explained Marco Sala, CEO of IGT. “That said, thanks to strong North America lottery performance and our swift adoption of cost-saving and avoidance measures, we delivered better cash flow than we expected back in May.

“Our resilience is a direct consequence of the diversity of our global portfolio of products and solutions. The improving trends we are currently seeing are encouraging, but we remain prudent with our planning. Our new organisational structure enhances our readiness to adapt to changes in market conditions.”

An operating loss of $94m contrasted with income of $224m a year earlier, driven in part by lower profit contribution from reduced business volumes, as adjusted EBITDA closed at a 63 per cent reduction to $168m (2019: $454m).

In an effort to accelerate the company’s response to market conditions, IGT asserts that over $200m has been identified in structural cost savings compared to pre-pandemic levels. 

These savings, expected to come in during 2021, are to come from eliminating duplicative functions and streamlining back-office activities, optimising global investment in technology to focus on value-accretive know-how, rationalising R&D based on disciplined risk/return priorities and optimising supply chain for maximum cost efficiency

“Cash generation and liquidity remain our top financial priority,” stated Max Chiara, CFO of IGT. “The proactive efficiency initiatives and focused capital markets activity we executed in the quarter have us tracking ahead of plan on all key measures and we expect to deliver positive free cash flow this fiscal year. 

“We have the resources we need to navigate the impact COVID-19 is having on our business and we are making important, strategic decisions to enhance our operational flexibility. This includes over $200m in structural and discretionary cost savings compared to pre-pandemic levels.”