Universal Entertainment Corp (UE), a leading Japanese casino corporation, achieved an US$86.5 million profit for the last year ending on 31 December 2022 after a loss amounting to US$144 million sustained in 2021. The 2022 profit was the outcome of the normal operating conditions resumed at the company’s integrated resort Okada Manila in the Philippines and the transition to new machines in its pachinko and pachislot supply business, as well as significant inflow generated from the exchange rates.
According to Inside Asian Gaming, Universal Entertainment recorded a consolidated net profit of JPY11.5 billion (US$86.5 million) to compensate for a significant part of the loss experienced in 2021 at the level of JPY19.1 billion (US$144 million). In 2022, the company’s net sales grew by 55.9% to reach JPY141.0 billion (US$1.06 billion) and drive the operations to the profitable end of the year.
Okada Manila’s compensation:
The overall Universal’s handle exceeding US$1 billion included a 103.7% increase in net sales at Okada Manila soaring to the zone of JPY71.8 billion (US$540 million). The Okada Manila resort‘s performance in 2022 resulted in an operating profit of JPY3.78 billion (US$28.4 million) to fully compensate for the loss of JPY1.87 billion (US$14.1 million) seen at the property in 2021. Furthermore, adjusted Segment EBITDA increased by as much as 263% to reach the level of JPY19.4 billion (US$146 million).
Busy market segment:
Japanese operator informed that the major reason for sales growth was the massive activity in this market segment. The source also informs that Universal Entertainment considers that the demand for pachinko and pachislot machines was lower than expected for 2022 due to the COVID-19-related restrictions. However, the operator also said that the utilization rate of machines recovered in 2022 driving the market for these machines beyond restricting factors into comfortable zones of profitability.
New machines as key recovery drivers:
Commenting on the operating resumption, the company stated: “This recovery was the result of the complete shift to machines conforming to the new regulations and the start of the full-scale introduction of pachislot machines that comply with the new 6.5 standard, which has new game playing characteristics, and of smart pachislot machines.”
The shift to the new machines in the given market segment resulted in a 26.0% growth of Universal’s net sales to JPY68.3 billion (US$514 million). As a consequence, the company’s operating profit in the segment increased by 48.9% to hit JPY19.8 billion (US$149 million) to prove that the transition to new machines was the right move for the casino giant to witness the full recovery and resume profitability of its operations. UE also informed that the group gained more than JPY10 billion (US$75.2 million) on exchange rates between the weaker yen and stronger US dollar to confirm that multiple factors have contributed to the overall recovery of Universal Entertainment’s operations.