The coronavirus has paralyzed the activity of the gaming industry in almost the entire planet. The regions with the highest demand and performance have had to temporarily close due to the rapid spread of the pandemic. Places like the Las Vegas Strip and Macao already resent the millionaire losses that will be reflected in their financial balances this year. Some countries, such as the United Kingdom and the United States, are even requesting rescue measures to lessen the economic impact of Covic-19, although gaming operators may need additional support.
Australian gaming equipment manufacturer and operator Aristocrat has just announced that it is ready to face the consequences of the dangerous virus, which originated in the Chinese region of Wuhan.
A long-term trust strategy
In a public statement, Aristocrat attempted to lessen concerns about the expected decline in its income and the possible impact on its clients. The company submitted a report to the Australian Stock Exchange, in which it claims recognition of the expected revenue declines but that it plans to overcome through a well-thought-out business model.
“The Group’s outstanding fundamentals continue to underpin our long-term strategy and confidence. Aristocrat has a conservative balance sheet, with net debt to EBITDA [earnings before interest, taxes, depreciation and amortization] of 1.4x (as of September 30, 2019),” the company said in its statement.
“Additionally, Aristocrat’s term credit line does not expire until October 2024 and has a reduced contract, providing significant financial flexibility,” it added.
Acting to overcome the crisis
Some of the measures taken by the leading slot machine supplier in that region to ensure the well-being and safety of its staff are already being implemented. Aristocrat banned its employees from traveling and announced a series of steps to separate its employees within the workplace. Most of its employees (about 6,400), representing 80% of the company’s staff, are working from home.
The company sees this as a time to remain calm in a particularly difficult period for everyone:
“The diversity of Aristocrat’s operations adds to the Group’s strength and flexibility. During fiscal year 2019, digital games generated more than $ 40 of the Group’s total revenue, while land-based gaming operations and direct sales contributed about another 30% each.”
It also explained that:
“Operations also extend across major global and regional markets, and our digital and terrestrial companies address a broader range of segments and genres than ever before.”
The unusual coronavirus pandemic will undoubtedly mark a before and after in the world’s economies. Faced with this reality, only casino operators who act intelligently and adapt their businesses to the terrible circumstances they are living in will be able to survive this challenging moment in world history.