GGRAsia – Universal now expects FY2024 loss, cites VIP play decline

Universal now expects FY2024 loss, cites VIP play decline

Nov 15, 2024 Newsdesk Japan, Latest News, Philippines, Top of the deck

Universal Entertainment Corp, the parent of the Okada Manila casino resort in the Philippines, says it is now expecting a loss for full-year 2024. The Japanese firm also said in a notice issued on Thursday that it will no longer pay a year-end dividend for 2024.

Universal Entertainment now expects a full-year net loss of JPY18.30 billion (US$116.90 million), against a previous forecast, in February, of net income of JPY19.60 billion.

The firm estimates net sales to reach JPY126.00 billion for the January to December 2024 period. It had previously forecast such sales to be JPY200.00 billion.

The estimate review followed the company announcing its results for the nine months to September 30. It posted a net loss of JPY19.46 billion for the period, on net sales of JPY92.37 billion – the latter were down by 25.6 percent in year-on-year terms.

Among the reasons mentioned by Universal Entertainment to cut its business forecast for full-year 2024 was the “uncertain situation caused by the possibility of a continuing decline in VIP customers across the entire casino market in the Philippines”, a trend that the firm said was “expected to continue.”

Universal Entertainment announced in October that third-quarter casino gross gaming revenue (GGR) had declined by 33.4 percent year-on-year at the Okada Manila casino resort. Quarterly GGR at the property has been declining in year-on-year terms since the end of the third quarter of last year, according to company information.

For the first nine months of 2024, Okada Manila’s GGR declined by 26.6 percent.

In its notice on the business forecast cut for 2024, the firm added that performance at its amusement equipments business – a reference to its ‘pachinko’ unit – was being impacted by “delays” in the release of “multiple major titles”.

The company has “regretfully decided to revise the year-end dividend forecast downward in line with the revision of the business results forecast,” said Universal Entertainment, scrapping a previous forecast of paying a year-end dividend of JPY0.30 per share.

The firm paid an interim dividend of JPY0.30 per share following the announcement of its second-quarter results.

In its nine-month results announcement on Thursday, Universal Entertainment said the management at Okada Manila was “recruiting and training people to strengthen marketing capabilities in the gaming business”.

It added: “One goal is to attract more people living [in] areas of the Philippines other than Luzon Island, where Manila is located, to serve a broader range of guests.”

The firm also mentioned “measures to strengthen marketing activities” targeting tourists from Japan, South Korea and Southeast Asian countries.