Universal falls to US$48 million loss in 1Q21 as Okada Manila, pachinko feel COVID-19 pressure

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Japans Universal Entertainment Corp reported a net loss attributable to owners of the parent of JPY5.21 billion (US$47.6 million) in the three months to 31 March 2021, with the Japan gaming giant feeling the impact of COVID-19 on both its domestic pachinko business and its Philippines integrated resort, Okada Manila.

The quarterly result included a 64.0% decline in group-wide sales to JPY14.67 billion and an operating loss of JPY4.04 billion compared with an operating profit of JPY5.88 billion in 1Q20.

According to the companys earnings release, published Friday, Okada Manila posted a 43.1% year-on-year decline in sales in Q1 to JPY8.95 billion, although it did manage to reduce its operating loss from JPY1.72 billion a year ago to JPY386 million. Adjusted EBITDA fell 33.6% to JPY1.44 billion.

Okada Manila, an integrated casino resort owned and operated by the Universal Entertainment Group, [had] partially resumed its gaming operation due to the efforts to mitigate the impact of COVID-19, the company said.

Following the deregulation, the hotel and restaurant businesses also partially resumed operations.

However, in response to the rapid increase in the number of coronavirus cases in the Philippines due to the outbreak of coronavirus variants in March 2021, the Philippine government implemented the Enhanced Community Quarantine from March 29 to April 11 and suspended economic activities to prevent the spread of the coronavirus, which was similar to the case in March 2020.

It is understood that Manilas casinos have resumed operating at limited capacity for invited guests only.

Universal also saw a 78.2% decrease in sales in its Amusement Equipment business to JPY5.38 billion, falling to a segment operating loss of JPY1.53 billion versus a profit of JPY9.51 billion in 1Q20.

The decline was due to a significant fall in the number of machines being purchased, down from 52,631 in the first quarter of 2020 to just 12,708 in 1Q21.

Pachinko halls remain cautious about replacing their existing machines because of uncertainty about when the COVID-19 crisis will end, Universal said. As a result, the number of Pachinko and Pachislot machines sold has remained low.