Universal Entertainment’s total earnings for 2020 experienced a decline of 27.3%, reaching 90.87 billion yen (equivalent to $625.3 million/€714.2 million/$865.8 million). This decrease can be attributed to the temporary shutdown of its Okada Manila resort, which counteracted the growth observed in its machine sales division.
Universal Entertainment is a prominent provider of pachinko machines and a leading operator of integrated resorts.
Of this total revenue, pachinko machine sales generated 61.79 billion yen, reflecting a notable increase of 19.7%.
In contrast, revenue derived from the Okada Manila integrated resort amounted to 27.7 billion yen, exhibiting a decrease of 37.0%. An additional 1.2 billion yen was generated from other sources, including social and video games.
All pachinko machines and other income sources were situated in Japan, where a total of 139,152 machines were sold.
The decline in integrated resort revenue was a direct consequence of the closure of Okada Manila on March 15. This closure was mandated by the Philippine Amusement and Gaming Corporation (Pagcor) in response to the novel coronavirus (Covid-19) pandemic. The resort resumed operations on September 9, but remained subject to a 30% capacity restriction.
After accounting for 40.78 billion yen in the cost of goods sold, Universal’s gross profit amounted to 50.01 billion yen, representing a decrease of 22.7%.
However, Universal’s expenses related to selling, general, and administrative activities decreased to 47.54 billion yen, resulting in an operating profit of 2.56 billion yen.
Following the deduction of 18.5 billion yen in non-operating income, Universal incurred a net loss of 9.35 billion yen. This represents an increase of 16.5% compared to the previous year, 2019.
The financial performance was primarily influenced by earnings from businesses with reduced ownership in Universal Holdings, coupled with non-operating costs of 13.66 billion yen, which included 10.17 billion yen in interest expenses.
Universal subsequently incurred an extra 10.5 billion yen in exceptional costs, of which 9.17 billion yen was connected to the closure of Okada Manila Resort due to the pandemic.
This resulted in a pre-tax deficit of 19.74 billion yen for Universal, representing a 113.1% year-over-year rise.
After subtracting income tax of 517 million yen, Universal’s net loss amounted to 19.22 billion yen, a 270.0% increase from the loss in 2019.
Looking forward, Universal stated that the future of both segments of its operations is uncertain due to the effects of the novel coronavirus (COVID-19) pandemic.
The company revealed plans to separate its integrated resort operations in the United States and combine it with a special purpose acquisition company (SPAC).
Image: Tomas Cermak from Freeimages.com
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