Machine sales hike boosts Universal Entertainment in H1

Japan’s Universal Entertainment Corporation has reported 24.9% year-on-year rise in sales for the first half of the year, with a significant rise in pachinko and pachislot machine sales offsetting a decline from its Philiippines integrated resort.

Net sales for the six months to 30 June amounted to JPY65.65bn (£471.8m/€524.6m/$621.3m), thanks to Universal’s amusement equipment business posting a 141.8% rise in sales, to JPY48.9m.

With the novel coronavirus (Covid-19) pandemic forcing pachinko halls closed, sales for devices plummeted in the second quarter. Just 11 machines were sold in that period, and 3,890 in the first half in total.

This, however, was more than offset by increased sales of pachislot machines – hybrid pachinko and slot games – which soared to 57,949 in Q2, and 106,701 for H1. In the full 12 months of 2019, 59,143 of the machines were sold.

For the integrated resort business, however, net sales – gross revenue minus gaming taxes and jackpots – were down 48.8% year-on-year to JPY16.10bn.

This unit, comprising the Okada Manilia property in the Philippine capital, has been shuttered since 15 March as a result of Covid-19. With Manilia in particular suffering from rising cases, its casinos are not expected to be permitted to reopen until mid-August.

Universal generated a further JPY649m in sales, primarily from its media content business, which develops free-to-play content, including the Slots Street social casino title, and console games.

Revenue-related costs for the half year rose marginally, up 4.2% to JPY26.69bn, leaving a gross profit of JPY38.96bn, up 44.7%. Selling, general and administrative expenses for H1 fell 14.6% to JPY26.29bn, leaving an operating profit of JPY12.67bn, compared to a JPY3.85bn loss in the prior year.

Universal then recorded JPY855m in non-operating income (down 24.4%), comprising interest and dividend income, and profit share from agreements.

The business also recorded JPY6.19bn in non-operating expenses, such as foreign exchange losses and interest charges, while after a JPY3.89bn non-recurring loss, related to the closure of Okada Manila, pre-tax profit stood at JPY3.45bn.

Universal’s tax contribution for the six month period amounted to JPY44m, with a JPY452m charge offset by a JPY408m deferral, resulting in net profit for H1 rising to JPY3.41bn, compared to a JPY9.04bn loss in 2019.

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