Macau Business Daily – SHFL entertainment Inc, a maker of casino equipment, announced its net profit tumbled in the last fiscal quarter, due to costs from the proposed merger with Bally Technologies Inc.
The United States firm reported on Wednesday U.S. time that net profit fell by 38.5 percent year-on-year to US$6.4 million (51.1 million patacas) in the three months ended July 31.
The estimated US$1.3-billion merger with Bally – another leading Nevada-based gaming equipment firm – cost the company US$3.6 million in the third quarter.
In an earnings release, SHFL said that the merger announced in July remains pending and subject to approval by its shareholders and gaming regulators in several jurisdictions.
It will take a year – until the second quarter of 2014 – to complete the merger process, said Neil Davidson, Bally’s chief financial officer, during a joint conference call with SHFL shared with analysts in July.
SHLF’s sales rose by 16 percent from a year earlier to US$73.5 million, which was below Wall Street estimates of revenue of US$78 million, online gaming news service GamblingCompliance reported.
SHFL sells slot machines, card shufflers and other gambling supplies. It dominates the Macau market in the utility products segment.
Utility revenue was up 5.3 percent to US$25.6 million.
Gaming machine revenue jumped 16.1 percent to US$23.1 million, lower than anticipated by analysts, who were also cagey over a 30 percent increase in costs.
“Overall results were disappointing, in our view,” Eilers Research director Todd Eilers said in a note to clients. The merger “could have been a distraction in the quarter,” he added.
In June SHFL chief executive Gavin Isaacs told our sister publication Macau Business magazine that the city’s gaming industry would “be a strong market focus for us in the year ahead”.
“We’re growing 20 percent a year here and I want to help keep it going,” Mr Isaacs said.
