Slot Machine Maker Aristocrat Leisure Posts $158m Annual Loss

Despite posting an annual profit of $101.2 million in 2008, poker machine producer Aristocrat Leisure Ltd was back in the red after suffering a $157.84 million loss in 2009.
The Australian company ran into trouble in 2001 after running into a dispute with US bondholders, who had their right to convert $130 million worth of bonds into stock terminated after the company called for the redemption of the bonds at face value.
Aristocrat Leisure puts the latest grim figure down to provision of $187.30 million set aside for the potential US litigation damages, as well as difficult market conditions and a drop in consumer confidence. Following news of the loss, a company statement read:
“During the period, Aristocrat faced adverse conditions across all major markets, with operators highly cautious about capital expenditure and limited new venue openings in North America and other markets.”
The US is still seen as key to the company’s well being but profit from the North American market had contracted by 18.8% to $152.3 million, while the smaller but important Japanese market saw profits fall by 68.6% to $16.4 million. Despite the company’s domestic Australian market bucking the trend and posting an increase in profits of 21.6% to $63.1 million, profits for the company were down 17% across the board at AUS$116.4 million.
Going forward, Chief Executive Officer Jamie Odell said: “2010 is going to be another tough year and we have a lot of work ahead. While we are still in the early stages of our 3-5 year turnaround, we are making important and steady progress across the breadth of our strategic change agenda.. The 2010 outlook for improved industry and customer operating conditions will depend on the rate at which macro economic conditions and general consumer confidence improves.”
In the meantime, the markets reacted unfavorably to the news with shares in Aristocrat Leisure Ltd falling 4.26% to AUS$4.27 during yesterday’s trading. The company’s shares have fallen further today and are now currently trading at AUS$4.20.