Australian slot machine supplier Ainsworth Game Technology has warned of a potential write-down of its Argentina gaming investment amid concerns over the devaluation of the local peso and moves to restrict the transfer of money within the country.
Ainsworth will publish its results for the six months to 30 June 2023 next Tuesday 29 August, and said in a Monday filing it expects to report a profit of AU$23 million. This, however, excludes a GAN profit uplift of around AU$2 million and any potential write-down on the Argentinian investments as one-off items.
Specifically, Ainsworth said it will record in its 1H23 results around AU$13 million of investments within Argentina, which have been made to hedge the devaluation of the Argentinian peso against the US Dollar and in response to the “increased limitations within Argentina to restrict the transfer of monies held in this region.”
Argentina’s central bank devalued its currency by almost 18% last week in response to far-right Javier Milei winning the country’s primary election, pushing the official peso rate from 287-per-USD to 350-per-USD in the space of a few days.
“Given the significant instability and macro-economic uncertainties in this region, the local currency within Argentina has resulted in a devaluation of these investments and the potential risks associated with recoveries have now increased, including recent developments of a reorganization petition being filed by the trustor which could impact recoverability,” Ainsworth said.
“The Company is pursuing the necessary actions to protect its investments and monitoring the situation and will provide updates to the market should any material adverse change occur.”
Ainsworth previously reported a profit after tax of AU$5.9 million (US$4 million) for the six months to 31 December 2022, impacted by one-off items, but noted at the time an underlying profit before tax of AU$18.8 million (US$13 million).
RelatedPosts
