Scientific Games has said it expects to save more than $100m from cost-saving measures it has rolled out to help reduce the impact of the novel coronavirus (Covid-19) on the business.
Last month, Scientific Games set out a broad range of actions that it said would preserve jobs and protect its operations during the ongoing pandemic.
These included its workforce having hours and pay reduced, while workers in support roles were furloughed. In addition, its executive leadership has voluntarily reduced its salaries by 50%, with chief executive Barry Cottle going without pay.
Such has been the impact of the measures that Scientific Games said it has cut more than $100m in costs for the second quarter. Workforce cost reductions are expected to result in savings of more than $50m, while capital expenditure in Q2 is set to be approximately $50m lower than budgeted.
For 2020 as a whole, Scientific Games said capital expenditures would be in the range of $210m to $240m, compared to the $300m to $330m estimate set prior to the outbreak.
Scientific Games also said that additional cost saving initiatives, including reductions in other operating expenses, could lead to further potential savings.
“We continue to reduce our costs so that that we can position our company to be an even stronger competitor as the industry begins to recover,” Cottle said. “We remain committed to providing our best in class products and services to our customers across lottery, igaming, sports betting and land-based casinos while innovating for the future.”
Meanwhile, Scientific Games has drawn around $480m under its revolving credit facilities to help increase flexibility during the pandemic. Scientific Games said proceeds from borrowings, when combined with cash on hand, would allow it to take advantage of opportunities to bolster the business as the industry recovers.
SciPlay, Scientific Games’ social gaming arm, of which it holds an 82% interest, also has a strong liquidity position, with cash on hand of approximately $130m, no outstanding debt and $150m available under a revolving credit facility.
“The diversity of our business, serving customers across the industry and around the globe, gives us unique strength in these challenging times,” Cottle added.