GGRAsia – Universal Ent 1H revenue up despite Okada Manila suspension

Universal Ent 1H revenue up despite Okada Manila suspension

Aug 07, 2020 Newsdesk Japan, Latest News, Philippines, Top of the deck

Japanese gaming conglomerate Universal Entertainment Corp says its group net sales in the first six months of 2020 actually rose by 24.9 percent, to nearly JPY65.65 billion (US$621.8 million), from JPY52.54 billion in the prior-year period.

Such growth was helped by a 141.8 percent year-on-year rise in net sales for the amusement equipment business, to JPY48.85 billion. Universal Entertainment makes pachinko and pachislot games for the Japanese domestic market, and more recently has branched into being a casino resort operator via the Okada Manila scheme (pictured) in the Philippine capital Manila.

Universal Entertainment reported a group-wide net profit of just over JPY3.41 billion in the six months to June 30, compared to a net loss of about JPY9.04 billion a year earlier.

The first-half results were mostly supported by a better performance in the opening quarter of 2020, as the group said its businesses were affected by the “global spread of the Covid-19 pandemic” in the second quarter.

In the integrated resort segment, “there was a big downturn in sales and earnings” during the first half, due to operations at the Okada Manila property having been suspended since March 15, as a countermeasure against Covid-19 in the Philippines, noted Universal Entertainment in a Thursday filing to the Tokyo Stock Exchange.

The lockdown measures in Metro Manila – encompassing the Entertainment City zone that is home to the Philippine capital’s large-scale casino resorts – have been retightened from August 4 because of a rising number of Covid-19 infections locally. Such measures are to run at least until August 18, according to the Philippine authorities.

Universal Entertainment’s subsidiary, Tiger Resort, Leisure and Entertainment Inc, operates the Okada Manila casino resort.

Net sales at Okada Manila fell 48.8 percent year-on-year in the first six months of 2020, to nearly JPY16.10 billion, as the property was mostly shuttered during the second quarter.

The group’s casino resort business widened its first-half operating loss to nearly JPY5.27 billion, versus JPY1.82 billion in the same period of 2019.

Adjusted segmental earnings before interest, taxation, depreciation and amortisation (EBITDA) in the integrated resort business were negative JPY1.32 billion, compared with positive EBITDA of JPY5.26 billion in first-half 2019. Group-wide adjusted EBITDA rose by 146.1 percent year-on-year, to just above JPY22.71 billion.

Universal Entertainment said on Thursday that Okada Manila was currently “creating a business resumption plan” so that operations can restart as soon as casinos in Manila are allowed to reopen.

The Japanese conglomerate said additionally that a deal to sell land close to the Okada Manila casino resort was for now being postponed. The company said in February that the total value of the land sale amounted to approximately PHP13.18 billion.

In Thursday’s filing, the parent company said it had received a document from the “purchaser of non-current assets regarding postponement in the transferring ownership of the assets and the guarantee payment.”

“Both parties foresee the resumption of economic activities following the lifting of lockdown in the Philippines. These parties are also currently considering having a new agreement to amend the former land sales agreement that has already been executed,” stated Universal Entertainment.

The group announced also that it had decided to “temporarily withdraw” its full-year business results forecast for the fiscal year ending December 31, 2020, due to the impact of the Covid-19 pandemic in its business.