GGRAsia – Universal Ent says higher 1H rev on Okada Manila ramp up

Universal Ent says higher 1H rev on Okada Manila ramp up

Aug 08, 2019 Newsdesk Latest News, Philippines, Top of the deck

Japanese gaming conglomerate Universal Entertainment Corp says its net sales in the first six months of 2019 rose by 12.9 percent, to just above JPY52.54 billion (US$495,2 million). Such growth was boosted by an increase in sales at the Okada Manila casino resort (pictured) in the Philippines, which grew by 45.2 percent year-on-year to nearly JPY31.42 billion, the group said in a Wednesday filing to the Tokyo Stock Exchange.

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

The parent company said it narrowed its operating loss to about JPY3.85 billion in the first half of 2019, compared to JPY6.93 billion a year earlier. The group’s casino resort business posted an operating loss of JPY1.82 billion for the reporting period, down from JPY3.04 billion in the first half of 2018.

Universal Entertainment – which also has interests in pachinko machine manufacturing – reported adjusted segmental earnings before interest, taxation, depreciation and amortisation (EBITDA) of nearly JPY9.23 billion in the first half of 2019, 226 percent higher than in the comparable period a year ago.

The casino resort business saw its adjusted segmental EBITDA soar to nearly JPY5.26 billion, from JPY290 million a year earlier.

Universal Entertainment reported a group-wide net loss of approximately JPY9.04 billion in the six months to June 30, compared to a net profit of JPY172.54 billion a year earlier. Such profit for the first half of 2018 included money from a compensation settlement worth US$2.4 billion paid by casino group Wynn Resorts Ltd to settle a stock redemption dispute.

The company said that the non-consolidated results from Tiger Resort, Leisure and Entertainment showed that Okada Manila’s second-quarter gross gaming revenue (GGR) rose by 12.7 percent year-on-year, to PHP8.14 billion (US$155.7 million). While revenue from the VIP segment declined by 8.0 percent year-on-year, to PHP3.56 billion in the three months to June 30, GGR from the mass-market table segment grew by 45.3 percent, to nearly PHP2.25 billion.

Judged on a half-year basis, GGR at Okada Manila went up 44.7 percent in the six months to June 30, to nearly PHP17.66 billion, from slightly more than PHP12.20 billion in the prior-year period.

Universal Entertainment said in its latest operating results that the “highest priority” at Okada Manila is “to continue adding attractions and amenities”.

The group stated: “Work is continuing on Hotel Tower B to add more hotel rooms and some rooms in this tower became operational in July 2019. More rooms will help support continued growth in the integrated resort business as well as better position the resort to host large group events and foreign tour groups.”

Universal Entertainment said it expected adjusted segmental EBITDA margin in the casino resort business “to continue to expand during 2019 as sales growth lowers fixed cost as a percentage of sales”.

It added: “VIP casino revenues are expected to continue growing driven by the addition of new junkets, and more demand from existing junkets … Mass market table and gaming machine revenue is expected to continue growing as the property continues to ramp up and new casino marketing initiatives continue to be implemented and improved.”