At this point in time, Universal Entertainment may only have nine months of sales data available to them, but the company’s executives must be optimistic about the figures they see.
Compared to the same period in 2018, the Japanese-based company reported an increase in net sales of 39.5% over those nine months. This is due to the positive performance of its combined operations at the integrated resort Okada Manila in the Philippines and in its pachinko and pachislot business.
Total net sales reached JPY93.48 billion ($1.84 billion) over the first nine months of this year. The company appears to have been greatly assisted by the redemption of its Wynn Stock that took place after a legal dispute was resolved in 2018. By September, the company declared a loss of JPY5.74 billion ($113.1 million) compared to last year’s JPY167.97 billion ($1.54 billion) income.
One positive number the company needs to be extremely excited about is that the adjusted EBITDA segment increased by a dramatic 938 percent to JPY21.04 billion ($414 million) in total. The resort of Okada Manila also saw a dramatic turnaround, with net sales rising 46.7 percent over the same period in 2018. They shifted from a loss in 2018 of JPY4.78 billion ($44 million) to a profit this year of JPY1.84 billion (US$ 36.2 million).
In 2018, Universal had to review its sales forecast as sales were not expected to reach anywhere close to the projections the company had hoped for. The company forecasts net sales of JPY92.7 billion ($82.3 million) in December 2018, a 37.8 percent decline in the expected JPY149 billion.
A month later, they started a multi-million-dollar buyback of their shares to try to gain greater control of the company. The company explained in a filing with the Jasdaq Securities Exchange that they were looking to buy back 600,000 common stock shares at a price of approximately $18.5 million. By the end of June, stock will be purchased.
As the year progressed, significant gains began to be seen in Universal Entertainment. The company announced a 72% jump in net gaming sales for August. This resulted in Php3.86 billion ($75 million) total gross revenue.
It is the resort of Okada Manila that is anticipated most of the company’s attention to Garner. Universal Entertainment stated in a statement that they “positioning the Integrated Resort Business for continued growth, in part by enabling the resort to host large group events and foreign tour groups.” They added, “At Okada Manila, the highest priority is to continue adding attractions and amenities.”
Because of the good news from Universal, Union Gaming (UG) has made several changes to its operator’s forecasts. “We are raising our 4Q20 Adjusted Segment EBITDA to ¥9.5bn [$87 million] (from ¥8.5bn) [$78 million) and our 2020 estimate to ¥43.7bn [$400 million] (from ¥40.8bn) [$370 million],” they wrote, adding that the move is focused on progress in the entertainment business of Universal, as well as 500 new rooms opening in Okada Manila.