Thank you. Good morning, everybody, and thank you for joining us for the Ainsworth conference call on the recent financial results for the six months period ended June 30, 2025. Lynn Mah, our Chief Financial Officer, and Mark Ludski, our Company Secretary, will also attend the conference call. On the call today, I will concentrate on the key points on the results and provide a regional review. Lynn will take you through the financials. All the numbers Lynn and I go through at the call are denominated in Australian dollars unless otherwise specified. At the end of the presentation, we would be pleased to answer any questions.
I also note that we have announced on ASX this morning that NOVOMATIC AG has notified Ainsworth Game Technology of its intention to make an unconditional alternative takeover bid for Ainsworth Game Technology at AUD 1 cash per share under Block 2.3 of the scheme implementation deed. The Independent Board Committee has released an announcement in relation to this matter this morning, and I refer shareholders to that announcement. As discussed in that announcement, further information will be provided to shareholders in respect of the takeover bid and the scheme in due course. Coming to page number four, the results summary. Let's make a start on page number five, sorry, with the summary of the financial results for the first half, 2025. The overall reported results were a profit after tax of AUD 4.9 million.
This normalized profit before tax, excluding currency translations and one-off item, of AUD 13.9 million on revenue of AUD 152.1 million. The normalized results reported were similar to the AUD 14.3 million in the previous corresponding period ended June 30, 2024, and in line with the market guidance of approximately AUD 14 million provided on May 12, 2025. Lynn will provide more details on this in her financial review. Underlying EBITDA for the period was AUD 26.9 million, consistent with the AUD 26.8 million reported in the prior period. The revenue of AUD 152 million reflected an increase of 25% on the prior period and had previously outlined a 6.6% increase on the period ended December 2024. The progression of profit initiatives in Australia has assisted to offset challenging conditions in the Americas and lower online contribution in the current period.
Despite the growth in the revenue experienced in the current period, the competitive and consolidated market we operate within requires Ainsworth to at least maintain its current level of investment in product development to ensure we can effectively compete with larger industry participants who have the skill to more readily invest in new technologies and innovative products. We remain cautious given these competitive factors and the challenging economic conditions, which will potentially impact the company's operation within the global market we operate within. On page six, you outline that at the reporting phase, we had a total of 6,649 units under gaming operations. The decrease on the 6,871 at December 31st, 2024, was primarily as a result of the reduction in Latin America and Finland operation units, which were converted from operations to sales during the current period.
Plus two units, including HHR units, represented 31% of total units, consistent with December 2024. Installations in new and expanded properties in Virginia, Wyoming, New Hampshire, and Kentucky occurred in the current period. International revenues accounted for 80% of the group's total revenue, lower when compared with the 86% in the prior period as a result of stronger domestic revenue contributions. Recurring revenue, including HHR, was AUD 50.7 million in the current period, consistent with the AUD 48.9 million in the prior period. HHR opportunities are expected to continue, although at a reduced rate in the coming period, following the passage of legislation for a new facility in Wichita, Kansas , more locations becoming available in Ontario, as well as continued installation in the Scottish market. Let me turn to the results from page number eight.
As I noted, revenue was AUD 152.1 million, an increase of 25% on the AUD 121.4 million in the prior period and AUD 6.6 million on the AUD 142.7 million in the prior period. The increase was attributable to improved revenue contributions within Australia in the current period following the release of the A-STAR Raptor cabinet in February 2025, which was highlighted in our trading update announced on May 12, 2025. Reflecting the introduction of A-STAR the Raptor, domestic revenue increased in the current period by 84% and 35% compared to prior periods and prior half. Gross margin achieved in the period was 56%, consistent with the prior half.
Margins continued to be adversely impacted in the period by a range of factors, including the product mix of sales in Latin America, competitive market conditions, the planned runout of previous generation cabinets prior to the launch of A-STAR Raptor across additional markets, and the under-recovery of production variances expensed in the period. As outlined on page nine, the underlying PBT was AUD 13.9 million, favorably compared to AUD 8.9 million in the prior half, however, lower than the AUD 14.3 million in the prior period. Translational and foreign currency losses in the current period were AUD 8.6 million compared to GANs of AUD 2 million in the prior period. These losses were primarily as a result of further weakening of the U.S. dollar aGANst the Australian dollar compared to the GANs recorded in the prior period and the prior half.
Other one-off items outside normal operations included a non-cash instalment charge of AUD 2.1 million for the online segment and AUD 1.6 million relating to costs associated with the announced NOVOMATIC scheme of arrangement. On page number 10, we outlined that the reported EBITDA was AUD 14.6 million for the current period. After considering currency and one-off items, underlying EBITDA was AUD 26.9 million, consistent with the AUD 26.8 million when compared with the prior period. This was primarily attributable to factors in Latin America as I have outlined and the reduced contribution from the online segment following the termination of the exclusivity agreement with GAN in March 2024. I do highlight that despite underlying EBITDA being consistent with the prior period, margins were 17.7% for half the year 2025 compared to 22% in the prior period, reflecting the marketing pressure experienced in the current period, as I have noted.
Coming now to page number seven in North America. North America revenue in the current period was AUD 83.1 million, an increase of 22.5% on the prior period and the prior half. Revenue in the current period on a constant currency basis was AUD 79.6 million, similar to the AUD 79.1 million in half 2024. The A-STAR Raptor cabinet continues to perform with titles from the Triple Troves and Coin Kingdom family . Machines based on the participation and lease under HHR connectivity, which generate recurring revenue, contributed 47% of the segment revenue. Machines under operations in North America at the reporting date were consistent at 2,961, which is 3,050 units per December 31st. HHR products continue to perform with 10,496 units connected to AGT HHR systems. At the reporting phase, following new installations and expenses in Virginia, Wyoming, New Hampshire, and Kentucky during the current period.
From average selling prices and recurring revenues, along with disciplined cost control, resulted in a rise in segment profit to AUD 36 million, whereas AUD 32.6 million in the prior period. Segment profit margin achieved a 43%, slightly lower than the 45% in the prior half. Margin thresholds were experienced within the region in the current period due to the increased sales contribution of game with gold products, poker, keno, and video reel content in the multi-game and video lottery market with that lower margin. Coming to Latin America and Europe, revenues of AUD 31.6 million were achieved in Latin America and Europe in the current period, compared to AUD 29.3 million in the prior period. However, a reduction of 16% to the AUD 37.5 million in the prior half. As noted, a reduction in revenue resulted from a tough economic condition within the region and continued import restriction within Mexico.
Demand continues to grow for the A-STAR raptor range of cabinets, with Expansion Link and San Bao series being consistently top-performing products in the region. At June 30, 2025, a total of 3,688 units were under operation, generating AUD 11.3 million in recurring revenue. A reduction of 7% to the prior period, however, a 9% increase compared to the prior half, with the average yield being maintained at $12 per day. The competitive landscape in the Latin America region has intensified and has assisted states to continue innovation to maintain our market position. The broader economic conditions, including inflation and changing consumer spending habits, have influenced discretionary spending on gaming, affecting revenue across the region. Page number 12. In page number one, outline the region of Asia Pacific, as we have previously reported this segment consolidated Australia, New Zealand, and Asia under the one region.
As a result of previously changed management and conceptualities introduced, Asia Pacific performance benefited from the release of the A-STAR Raptor, which resulted in a revenue of AUD 34.6 million in the current period, an increase of 81% and 47% on prior period and prior half. The region achieved 1,049 units based in the period, with Australia contributing 92%. Average selling price was AUD 25,900, consistent with the prior period, and an increase from the AUD 22,800 in the prior half, due to discounting the run-up inventories on previous generation models prior to the launch of A-STAR Raptor cabinet. Segment profit improved to AUD 7.9 million compared to AUD 1.6 million in the prior period, with gross growth and segment margin increasing as a result of operating leverage and higher unit volumes and revenue.
The A-STAR Raptor cabinet was launched with three game families, Year of the Snake, Nugget Hunter, and Eagle Riches , each released with two titles. All these games have consistently performed above house average since the rollout. For ongoing review of regulations and technical standards for Australia and New Zealand regulations, as expected, once implemented to prevent gaming manufacturers with additional restrictions, include the development of gaming machines, game software, and related equipment. On page number 22, we outline the digital segments, which reported revenue of AUD 2.08 million compared to AUD 5.1 million in the prior period. Following the termination of the GAN exclusivity contract in March 2024, the group continues to directly pursue opportunities with global operators, including BetMGM, Caesars, DraftKings, Resorts and Rush Street . I will now ask Lynn to outline a summary of the financials.
Thank you, Harald. Turning to page 11, operating costs continue to be carefully managed, rising by 4% to AUD 71.4 million compared to the PCP. However, we're consistent on both a constant currency basis and compared to half the calendar year 2024. Operating costs reflected an increase in variable selling costs on the higher revenue achieved during the period. The implementation of cost measures, focusing on technology, development, and culture to improve product performance, lift staff retention rates, and enable the attraction of experienced development talent resulted in improved fixed cost salary in research and development and administration expenses. R&D expenses were broadly consistent with the PCP and prior half, reflecting the company's continued focus on product development investment to produce competitive products. R&D expenses, as a percentage of total revenue, was 16% in the current period, a reduction on the 21% in the PCC.
The reduction as a percentage of revenues reflected the higher revenue achieved, as well as reduced evaluation and testing costs and the lower amortization expenses in the current period on previous generation products. On page 12, AGT's Headcount was 569 employees on the reporting date, with 65% within the Americas. This represents a turning point compared to the same period in 2024, with reductions in Asia Pacific assisting to offset additional resources within the Americas. R&D resources increased to 182 at 30th June 2025, slightly higher than both in the PCP and prior half. However, 53% were located within the Americas compared to 48% at the same period in calendar year 2024. The global organizational structure provides product leadership with clear lines of accountability to ensure efficiencies and the ongoing development of a broad range of diverse and new product offerings.
Management continues to implement measures focusing on technology, development, and culture to improve overall product performance, lift staff retention rates, and enhance AGT's ability to secure new development talent. On page 14, you'll see we close the current period with a net cash position of AUD 1.1 million with growing of AUD 11.4 million. The reduction in net cash positions of AUD 8.3 million compared to 31st December 2024 was primarily due to inventory requirements purchased during the reporting period to fulfill ongoing production requirements. I do note that the loan facility established with the company's lenders, Western Alliance Bank Corporation, was amended in June 2025, resulting in an increase of facility amounting to $75 million . Previously, it was $ 50 million .
The increase in this facility was undertaken in line with requirements disclosed under the scheme's implementation deeds to potentially fund any committed dividend as allowed under the suitable arrangement subject to satisfaction of conditions. Further details are provided in a scheme booklet announced on 25th July 2025. Inventories held as of 30th June 2025 were AUD 78.2 million, representing an increase of 14% on the AUD 68.4 million at the end of December 2024. The increase in inventory levels was required to fulfill production requirements for expected demand, with 34% represented by finished goods. Initiatives have been progressively undertaken to ensure the end-of-life condition of all the cabinets is managed effectively and minimize working capital pressures. The company has AUD 356.4 million of net assets for the reporting date. On page 15, cash outflow from operating activities in the period was AUD 4.7 million, with borrowing on established operations of AUD 11.4 million.
Borrowing from the loan facility previously made to facilitate payments through the Mexican T Administration Service Sales was partially detailed in the period with additional drawdowns being made for working capital purposes. Net cash held at the reporting phase was AUD 1.10 million, a decrease on the AUD 9.7 million reported at 31st December 2024 following additional working capital investment, primarily inventory positions to ensure production requirements are able to be fulfilled. Thank you, and I will now hand you back to Harald for some concluding remarks.
Thank you, Lynn. In conclusion, Ainsworth made in the current half-year period and entered the remainder of calendar 2025 with a solid foundation following college progress against identified strategies with good momentum and expectation of continued improvement in product performance and profitability. Ainsworth's North America business continues to make progress in both class two and class three markets. Opportunities are continually being pursued in existing and new HHR markets. Despite more volatile market conditions in Latin America, the conference maintains its position to benefit as concurrents are elected in these regions. Domestic markets have benefited from the A-STAR Raptor hardware release, combined with further improvement in game performance following the release of new game titles. We will continue to leverage our key strengths of Ainsworth's trusted brand and the company's enduring commitment to develop superior game technology and entertaining offerings for our customers and players.
With a strong balance sheet and the commitment to produce innovation, Ainsworth will pursue strategies to deliver improved financial performance. As I have previously outlined in the past, to sustain our performance, measures are needed to R&D investments, which are necessary to lift the competitiveness of our product and pursue potential growth opportunities as they arise. The expanded capabilities within R&D, both the signature of Vega Studios as well as additional R&D studios, have enabled more creativity and diversity to our product offerings. Quality initiatives are continually assessed to improve game design, mathematics, and graphical arts to create a more diverse and targeted range of product offerings to our customers. We have implemented measures focusing on technology, development, and culture to improve product performance, lift staff retention rates, and enhance AGT's ability to secure our position in a highly competitive and consolidated market.
Before I close, I would like to formally thank the board and my colleagues at Ainsworth for their continuing contributions under challenging circumstances. I remain optimistic that we have put in place the necessary infrastructure going forward to effectively compete against larger providers with significant scale and resources. Prior to opening the call to questions, I would like to remind participants that any questions and discussions should be in relation to the results released yesterday, including the operating and financial performance of the business. We appreciate that you may have questions regarding the Novomatic transaction. If you do have questions regarding the Novomatic transaction, we refer to the ASX announcement that we released this morning. Thank you for your time today. I will now hand back to the operator to open up the lines for questions. Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speaker phone, please pick up your handset to ask your question. The first question comes from Helen Karlis with Morrow Sodali. Please go ahead. Helen Karlis, your line is open. Again, that is star one to ask a question.
Okay. Let's come to the next question.
There are no further questions at this time.
Perfect. I thank everybody for the participation on the conference call, and thanks for your support and see you soon. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect your line.