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Universal Entertainment sees 1Q23 profits slide on subdued pachinko machine sales – IAG

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Japan’s Universal Entertainment Corp, which counts Philippines integrated resort Okada Manila among its core assets, reported a 64.8% year-on-year decline in net profit attributable to owners of the parent to JPY2.95 billion (US$21.7 million) in 1Q23, impacted by lower pachislot and pachinko machine sales.

The company said Friday that total units sold in its Amusement Equipment Business during the March quarter fell by 12,836 units to 24,903 units, resulting in a 31.4% decline in net sales to JPY11.15 billion (US$82.1 million). It did, however, note that it had received orders for 50,000 units in the June quarter alone – boosted by the introduction of Japan’s new 6.5 standards and the development of smart pachislot machines.

It added that replacements of machines in pachinko halls was shifting towards smart pachislot machines which offer a “broader range of game playing characteristics”, resulting in a “steady recovery of the pachislot market following a prolonged slump.”

Despite a slow March quarter for the pachislot and pachinko segment, Universal said group-wide sales grew 22.0% year-on-year to JPY35.5 billion (US$261 million), aided by the recovery of Okada Manila.

Net sales at Okada Manila grew by 114% to JPY24.1 billion (US$177 million), generating an operating profit of JPY4.1 billion (US$30.2 million) – reversing a 1Q22 loss – and Adjusted EBITDA of JPY7.93 billion (US$58.4 million), up 226% year-on-year.

“In the first quarter, there was a gradual increase in the number of visitors [to Okada Manila] not only within the Philippines but also from other countries, and business performance has remained strong,” said Universal, which also outlined its growth plans over the coming months.

“To continue to attract an even broader range of local visitors in the gaming business, one priority is increasing the scale of online games that can be played within the Philippines. This includes measures to target gaming demand in areas of the Philippines other than Luzon Island, where Manila is located.

“To attract more foreign tourists, we are also conducting a large volume of marketing activities in Japan, South Korea, Thailand and other Asian countries.”

The subsidiary that operates Okada Manila – Tiger Resort, Leisure and Entertainment Inc – reported its 1Q23 financial results last month.

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