IGT EBITDA leverage declines in 2023

Due to double-digit growth in its gaming segment during the third quarter of this year, Fitch Ratings Inc. predicts that International Game Technology Plc (IGT), a supplier to casinos and gaming, will reduce its leverage to earnings before interest, taxes, depreciation, and amortization (EBITDA) to 3.6x in 2023.

According to Fitch, IGT’s EBITDA leverage will drop even further, reaching “low 3.0x by 2026.”

IGT still has around 48% of its current US$300 million share repurchase program left, according to the rating agency, which also predicted a highly positive dividend policy from the company. The program finishes in November 2025. The possibility of tuck-in mergers and acquisitions was also highlighted by Fitch, who cited the advantages of IGT’s 2022 acquisition of iSoftBet, a producer of online and mobile casino games.

IGT reported its third-quarter results on October 31, and according to Fitch, the firm will report its profits for the fourth quarter and the whole year 2023 in the current year’s first quarter. IGT’s net debt increased from $5.15 billion at the end of 2022 to $5.25 billion as of September 30.

IGT’s senior secured debt rating of ‘BBB-‘/’RR2’ and long-term issuer default rating of ‘BB+’ were confirmed by Fitch. The grade demonstrates IGT’s sensible leverage profile, excellent profitability, and liquidity. IGT has maintained its long-term issuer default rating at ‘BB+’ for its lottery business, IGT Lottery Holdings BV.

IGT’s installed slot base benefits from robust expansion internationally and stability in North America, according to Fitch, which also noted that trends in the company’s slot industry have steadied. The organization claims that IGT’s average daily returns on installed slots in North America are still greater than they were prior to the epidemic and that this level has been attained globally. In addition, average sales prices have gone up across the board.

In June, IGT stated that it was contemplating selling or spinning off its gaming and digital businesses. Fitch thinks that if the current situation doesn’t continue, some of the earnings from these kinds of operations might be used to further reduce debt and improve IGT’s liquidity for the next lottery rebid cycle.

Original story by: GGRAsia