GGRAsia – Sega Sammy lifts revenue forecast but flags IR drag

Sega Sammy lifts revenue forecast but flags IR drag

Feb 11, 2022 Newsdesk Japan, Latest News, Top of the deck

Japanese entertainment conglomerate Sega Sammy Holdings Inc has revised upward its earnings forecast for the year ending March 31, 2022. The company said on Thursday the revision was based on higher-than-expected sales in the entertainment contents business and pachislot and pachinko machine business.

But the group flagged an expected decline in revenue in its integrated resort (IR) business, due to the re-emergence of Covid-19 infections across the region.

In its latest forecast, Sega Sammy said it now expected net sales of JPY31.00 billion (US$2.71 billion) for the year to March 31, up from a previous forecast of JPY305 billion. The forecast for net sales in the entertainment content business and in the pachislot and pachinko segment have been revised upwards by 1.1 percent and 13.1 percent, respectively.

The company however said net sales in the resort business are now expected at JPY8.50 billion for the fiscal year ending in March, down from a previous forecast of JPY9.50 billion. The segment is now expected to report a JPY7.00 billion loss, up from a previous forecast of JPY6.50 billion.

Sega Sammy is a partner – alongside South Korean casino operator Paradise Co Ltd – in the Paradise City casino resort (pictured) near South Korea’s Incheon International Airport. The gaming portion of the facility is only permitted to cater to foreigners – many of its clients are Japanese, according to corporate information.

Sega Sammy also operates a non-gaming resort in Japan – Phoenix Seagaia Resort – located in Miyazaki prefecture. It includes a total of 950 hotel rooms, golf courses, a convention centre and other entertainment facilities.

“Due to the re-expansion of Covid-19, it is expected that the attraction of customers to [these] facilities will be sluggish in the fourth quarter of this fiscal year,” said Sega Sammy on Thursday. “As a result, net sales are expected to decrease, and ordinary loss is expected to increase from the previous forecast,” it added.

Group-wide, the group is now expecting an operating income of JPY31.00 billion for the year ended March 31, up from a previous estimate of JPY23.00 billion; and a net profit of JPY26.50 billion, up from a previous forecast of JPY15.00 billion.