AGS Cites Strong Approach To Rest Of 2020
Las Vegas-headquartered casino group AGS has apparently discovered the secret to beating all odds. The firm recently documented the impact the current global economic crisis has had on its Q1 performance and has assured its investors that despite widespread North American business closures, which of course includes all casinos, it remains on track to approach the remainder of the year from a position of strength.
AGS Chief Financial Officer Kimo Akiona explained that the current crisis has catapulted the group’s operations into absolute cost-cutting survival mode and that extensive operational savings and cash-preserving programs implemented over the course of the past couple of months have now resulted in a position of strength in the face of a particularly challenging year. A proactive stance has in effect positioned AGS in a favourable liquidity position, said Akiona.
Pro-Action Saved The Day
The measures put into place relatively early on in the process include a decision to draw the full $30 million available to the group under the terms of an existing revolving credit facility. The group has furthermore decided it best, given the current circumstances, to postpone as far out in the future as possible the payment of all capital expenditures. Akiona also confirmed that AGS on May 1st entered into an agreement that saw the group interim term loans to the value of at least $95 million in total.
The financial safeguards in place obviously do not imply that the group has somehow escaped the effects of current global conditions. AGS stuck to its previously announced withdrawal of earlier more favourable 2020 projections. Akiona explained that circumstances currently at play are the result of government’s decisions handed down in an effort to contain a nation-wide and certainly global crisis. AGS has prevailed not because of, but rather in spite of, implied the CFO.
Affected But Not Defeated
As far as the impact on revenue for Q1 is concerned, AGS has now reported a 26% decline – i.e. $54.3 million for the first 3 months of the year, as opposed to $69.6 million reported during the same period last year.
Net loss was reported at $14.4 million, indicating quite a significant increase in losses when compared to 2019’s $100,000 reported net loss. The combination of reduced performance and an increase in value lost has obviously taken a major toll on the reported adjusted EBITDA, now lower by a worrying 32%.
But all isn’t lost, asserts Akiona. A strong culture as a starting point to all recovery efforts has ensured that AGS is now able to focus not merely on surviving a global economic crisis, but instead on how to best go about building a strong future for shareholders, employees and of course, customers.