Ainsworth Profits Down By 65% In H1 Report

Ainsworth Game Technology, the Australian manufacturer of slot machines, has disclosed a substantial decline in its net profit for the first half of the financial year. The company reported a 65% drop in net profit compared to the same period last year, amounting to AUD 4.9 million (approximately USD 3.2 million), down from AUD 14 million in the previous year.

Despite the drop in profit, Ainsworth’s total segment revenue saw an increase of 25.3% year-on-year, reaching AUD 152.1 million. The rising revenue alongside falling profits has led to questions about the company’s operational efficiency and market conditions. In a recent filing to the Australian Securities Exchange, Ainsworth attributed the profit decline to a lower segment margin of 35%, which was impacted by several factors, including the product mix of sales in Latin America and heightened competition in the market.

Factors Influencing Profit Margins

Ainsworth’s chairman, Danny Gladstone, acknowledged the challenges faced during this period but expressed confidence in the company’s strategic direction. He noted that the development activities undertaken in previous years have positioned the company for sustainable profitability. The planned phase-out of older cabinet models, in anticipation of the launch of the new A-Star Raptor, also played a role in the profit decline.

In response to the profit decline, Ainsworth has implemented various cost management measures aimed at improving operational efficiency. The company says it has focused on enhancing technology, fostering a positive corporate culture, and improving staff retention rates.

The company’s earnings before interest, taxation, depreciation, and amortisation (EBITDA) also experienced a significant decline, dropping 48.2% year-on-year to AUD 14.6 million. Ainsworth’s earnings presentation highlighted that this figure included AUD 8.7 million in currency translation losses, a stark contrast to the AUD 2 million and AUD 7.6 million in currency translation gains recorded in the previous year.

Slot Machine Operations

As of June 30, Ainsworth had a total of 3,688 slot machine units in operation, generating AUD 11.3 million in recurring revenue. While this represents a 7% decrease compared to the previous calendar period, it marks a 9% increase compared to the prior half. The average yield from these machines has remained stable at approximately USD 12 per day.

Ainsworth’s performance in the Asia Pacific region has shown improvement, particularly following the release of the A-Star Raptor cabinet in February 2025. Revenue from this segment surged to AUD 34.6 million, reflecting an impressive 81% increase from AUD 19.1 million in the prior calendar period. The region also achieved 1,049 unit sales, marking a 90% increase year-on-year. The average selling price for these units remained consistent at AUD 25,900.

Novomatic New Offer

Ainsworth’s financial report also included commentary on an offer made by its majority owner, Novomatic AG, to acquire the remaining minority shareholdings for AUD 1.00 per share. This offer, valued at AUD 336 million, was below the group’s net asset carrying value, prompting an impairment assessment. Consequently, management recognised an impairment charge of AUD 2.1 million against the carrying value of the online cash-generating unit, reflecting the underperformance in financial results.

The segment revenue from online gaming has also faced challenges, plummeting 45.1% year-on-year to AUD 2.8 million in the first half of this year. This decline underscores the need for Ainsworth to reassess its online gaming strategy and explore avenues for revitalisation in this segment.