The composite index increased 1.97 points to 423.92 points at month end
The AGEM Index experienced a slight increase on mixed stock performance. The composite index stood at 423.92 points at the close of July 2017, which represents an increase of 1.97 points, or 0.47 percent, when compared to June 2017. The AGEM Index reported a year-over-year increase for the 22nd consecutive month and has climbed 129.24 points, or 43.9 percent, since July 2016.
During the latest period, six of the 13 global gaming equipment manufacturers reported month-to-month increases in stock price, with two up by more than 10 percent. Seven manufacturers reported decreases in stock price during the month, with two posting double-digit declines.
The broader stock markets produced positive results in July. The S&P 500 reported a month-to-month increase, rising 2.1 percent to 2,470.30. Additionally, the Dow Jones Industrial Average increased 1.9 percent to 21,891.12, while the NASDAQ increased 3.3 percent during the period to 6,348.12.
Selected positive contributors to the July 2017 AGEM Index included the following:
Scientific Games Corporation (SGMS) contributed 18.31 points due to a 40.34 percent increase in stock price to US$37.05. International Game Technology (IGT) reported a 5.72 percent increase in stock price to US$19.04 and contributed 3.02 points.
Selected negative contributors included the following: With its stock price falling 11.89 percent to AU$20.23, Aristocrat Technologies (ASX:ALL) contributed negative 11.75 points. Konami Corporation contributed negative 6.54 points on a 7.85 percent decrease in stock price to ¥5,750. Crane Company reported a 3.91 percent decrease in stock price to US$75.50, contributing negative 2.41 points.
Scientific Games reports good Q2 2017
In recent months, several slot machine manufacturing companies have released quarterly earnings reports. Below are selected highlights and results. Scientific Games Corporation (SGMS) reported second quarter earnings totalling US$766.3 million, a 5 percent increase from the US$729.2 million in the previous year. Attributable EBITDA reported a 13 percent increase from the prior year to US$314.8 million.
Revenue growth was attributable primarily to Scientific Games’ gaming and interactive segments. Gaming revenue increased 3.5 percent to US$457.2 million on increases in the sale of gaming machines and gaming systems. This was despite the fact that there were no new casino openings in the company’s primary markets. Unit mix for sales also improved as the average price for gaming machines increased from US$16,859 to US$17,550. Gaming system sales were up 13 percent on new installations in Aliante Casino Hotel, Baha Mar Resort, and ilani tribal casino along with the shipment of the new iVIEW4 player-interface display units.
For the company’s interactive unit, revenues grew 28 percent to US$106.8 million as social gaming revenue from its business-to-consumer segment grew 31.8 percent. This social gaming revenue growth was attributed to both the continuing popularity of its current products, the introduction of a new app in early 2017 and the acquisition of Spicerack Media in April 2017, which expanded the app offerings. Better than expected results and an analyst upgrade positively impacted the company’s stock.
IGT reported revenues of US$1.2 billion in the second quarter of 2017, a 5 percent decrease from revenues in the previous year. Revenue figures were impacted by the new Lotto concession dynamics and the sale of Double Down Interactive, which closed in June. Adjusted EBITDA totalled US$424 million for the quarter, down 4 percent from the US$443 million reported in the second quarter of 2016. EBITDA was similarly impacted by the sale of Double Down Interactive.
Konami Corporation announced first quarter of fiscal year 2018 revenue results of ¥55.7 billion, which represented a 12.8 percent increase over the same quarter of the previous year. The gaming and systems unit, which represents the group’s casino offerings, reported revenue of ¥6.5 billion. Gaming and systems revenue decreased 4.4 percent from the prior year and made up 12 percent of Konami Corporation’s top line revenue. Declines in gaming and systems revenue was attributed to instalments of Konami’s casino management system mostly at small and medium-sized casinos. However, slot machine sales still reported strong figures in the North American market.
The AGEM Index
The Association of Gaming Equipment Manufacturers (AGEM) produces the monthly AGEM Index that comprises 13 global gaming suppliers throughout the world. A total of 8 suppliers are based in the United States and are listed on the NYSE, Nasdaq or OTC market, while two trade on the Australian exchange, one supplier trades on the Athens exchange, one on the Tokyo exchange, and another trades on the Taiwan OTC exchange. (E-08.08.17)