Philippine casino resort Okada Manila posted net sales of nearly JPY8.89 billion (US$78 million) and an operating loss of JPY7.06 billion as outlined in the latest quarterly reporting period of its parent firm.
The filing also said Okada Manila is to have a “grand opening” in early 2018, more than a year after it first opened some facilities to the public.
The parent firm, Japanese gaming conglomerate Universal Entertainment Corp, gave the news in a Wednesday filing to the Tokyo Stock Exchange. The group added that the casino business was ramping up as more facilities were launched.
There has been a dispute – played out in the media in the Philippines and in Japan – about exactly who is ultimately in charge at Okada Manila. The resort’s eponymous figurehead – Japanese entrepreneur Kazuo Okada – is currently in a tussle with Universal Entertainment, the group he founded, on a range of legal and corporate governance issues. They include allegations by the Universal Entertainment board that Mr Okada committed “acts of fraudulence” in relation to several business transactions involving the parent.
Mr Okada recently told Philippine media outlets that a backdoor listing for Okada Manila – via a firm already on the Philippine Stock Exchange – was being planned. Last month Universal Entertainment said it was “not aware” of such a proposal.
Notwithstanding the spat, Universal Entertainment noted in its Wednesday filing: “Earnings continue to increase due to the completion of a VIP casino and other measures. The plan is for Okada Manila to start making a material contribution to consolidated [group] performance once this resort and casino holds its grand opening.”
Okada Manila, promoted by Universal Entertainment’s unit Tiger Resort, Leisure and Entertainment Inc, had a progressive soft opening, starting in December 2016 with some amenities but excluding at that time the hotel accommodation.
“The number of completed rooms in the Pearl Wing luxury hotel, which will have 464 rooms when finished, is increasing. Construction of the fine dining section and shopping mall is also developing and more tenants are starting operations,” said Universal Entertainment in its latest commentary on Okada Manila.
“The improvement in monthly profitability is continuing in the casino resort business as the rising utilisation rate of facilities makes it possible to cover an increasing amount of fixed expenses,” the parent added.
“Work is now in the final stage of preparations for the planned grand opening of this casino and resort early in 2018,” further noted Universal Entertainment in its regulatory statement.
The announcement also stated the resort would open an indoor beach-style facility called Cove Manila – located under a large dome at the property – in December.
Macau court case
Universal Entertainment stated it is continuing to pursue via the Macau courts – on investors’ behalf – a dispute originating from Mr Okada’s previous role as a shareholder of Wynn Resorts Ltd, parent of Macau casino operator Wynn Macau Ltd.
The latest filing noted that in February 2015, Universal Entertainment, an associated business – casino slot machine Aruze USA Inc – and others, had filed a lawsuit in Macau’s Court of First Instance against Wynn Resorts (Macau) SA – a unit of Wynn Macau – and four of the latter’s directors, including Wynn Resorts’ founder and chairman Steve Wynn.
The suit had asked for the “dissolution of Wynn Resorts (Macau), the payment of damages totalling MOP8 billion and other actions,” noted Universal’s latest filing.
On July 11, the court reached a verdict that rejected all of Universal Entertainment’s demands. Universal Entertainment said in its latest operating update: “The company is dissatisfied with the decision and took the appeal procedure on July 27, 2017 and submitted the appeal statement of the reasons on October 16, 2017.”
Universal Entertainment, which also has interests in pachinko machine manufacturing, reported a loss of nearly JPY6.62 billion in its latest quarterly results. Group net sales for the period were JPY43.39 billion.
In June this year, the group’s shareholders agreed to change the end of its fiscal year from March 31 to December 31. As a result, strict year-on-year comparison of quarterly results was not available in the latest numbers.
In the reporting period, the group’s pachislot and pachinko business posted net sales of JPY33.10 billion and operating profit of JPY1.81 billion.
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Analyst at Roth Capital Partners