GGRAsia – Okada Manila pause to cost US$139mln in rev: Universal

Okada Manila pause to cost US$139mln in rev: Universal

Apr 16, 2020 Newsdesk Latest News, Philippines, Top of the deck

The promoter of the Okada Manila casino resort (pictured) in the Philippine capital expects the current temporary shutdown of the property will result in a decrease in net sales of JPY15 billion (about US$139 million).

The Philippine authorities announced last week the extension of its anti-coronavirus lockdown of the country’s main island Luzon until April 30.

The Okada Manila resort’s parent, Japan-based Universal Entertainment Corp, said in a release on Wednesday it had “suspended operation of all or a part” of the facilities at the property since March 15, in response to a request from the local gaming regulator, the Philippine Amusement and Gaming Corp.

Universal Entertainment said it expected the measures requiring the closure of Okada Manila could be further extended until mid-May, resulting effectively in a suspension of operations at the property for an aggregate of two months. The firm added that a closure for two months was expected to have an impact in net revenue of JPY15 billion, which in turn would translate into a reduction of JPY6 billion respectively in operating income and net income.

Based on such estimates, Universal Entertainment decided to cut its performance forecast for calendar year 2020, said the firm. The company now expects to achieve net sales of JPY175.0 billion, a decline of 7.9 percent compared to the company’s prior estimate. The firm reduced its estimate for full-year operating income by 21.1 percent to JPY22.5 billion. Net income is now forecast to hit JPY26.0 billion, a decline of 18.8 percent compared to the prior estimate.

Universal Entertainment also makes pachinko and pachislot machines for a form of arcade entertainment popular in Japan. The firm said in its Wednesday statement it was not reviewing its results estimates for this business segment, as it was performing “at [a] level exceeding our original sales plans”.

March GGR at Okada Manila halved

Looking at the group’s first quarter results, Universal Entertainment stated it expected the performance from its pachinko business to compensate for the “losses” originated by the temporary closure of Okada Manila.

The firm said that, according to non-audited information currently available, Universal Entertainment was likely to have achieved consolidated net sales of JPY40 billion in the first three months of 2020, resulting in operating income of JPY5.5 billion.

In a separate release, Universal Entertainment said Okada Manila’s total March gross gaming revenue (GGR) was down by around 54 percent year-on-year, coinciding with the temporary closure of the property since March 15. Such GGR was less than PHP1.52 billion (US$29.9 million), compared to PHP3.30 billion a year earlier, according to preliminary data released on Wednesday.

VIP table games GGR in March went down 49.3 percent year-on-year in the month, to just under PHP849 million, from slightly above PHP1.67 billion. The VIP rolling chip win rate stood at 5.67 percent last month, compared to 3.22 percent in March 2019.

VIP rolling chip volume for March was down by 71.2 percent at just PHP14.96 billion, versus PHP51.97 billion in the prior-year period.

Mass-market table games GGR at Okada Manila in March declined by two thirds to PHP242 million, from PHP714 million. Electronic gaming machine GGR decreased by 53.5 percent to PHP424 million, from PHP991 million.

“Other” March revenue went down 73.5 percent to PHP52 million, compared to PHP196 million in the same month a year earlier, according to Wednesday’s release.

March’s adjusted segment losses before interest, taxation, depreciation and amortisation amounted to PHP248 million versus earning of PHP509 million in March 2019.

First-quarter GGR at Okada Manila was down by almost 9.3 percent year-on-year, to less than PHP8.64 billion. VIP table games GGR in the January to March period went down 7.1 percent year-on-year, to just under PHP4.58 billion.

Mass-market table games GGR at Okada Manila in the three months ended March 31 declined by 22.7 percent to close to PHP1.70 billion, from PHP2.20 billion. Electronic gaming machine GGR decreased by just 1.3 percent to PHP2.36 billion.

Adjusted segment earnings before interest, taxation, depreciation and amortisation for the first quarter at Okada Manila amounted to PHP1.07 billion versus PHP1.52 billion in the prior-year period.