Japanese gaming conglomerate Universal Entertainment reported net income of 168 billion yen (about US$1.5 billion) and net sales of 67 billion yen (about US$593 million) for the first nine months of 2018.
The company derives most of its revenue from its pachislot and pachinko business and its casino resort business in the Philippines, Okada Manila.
In the nine-month period, the group posted 31.7 billion yen (about US$281 million) in net sales from its pachislot and pachinko business, and an operating loss of 1.9 million yen (about US$17 million) from the division.
Universal said the tightened rules affecting amusement machines in Japan which came into effect early this year caused a difficult environment for the company. To combat this, Universal said it has been conducting sales activities to assist pachinko halls to attract more customers.
In its Okada Manila operation, Universal posted net sales of 33.8 billion yen (about US$299 million) and an operating loss of 4.8 billion yen (about US$42 million) in the first nine months of 2018.
Universal noted that net sales during the third quarter of 2018 was down 4.3 percent from the previous quarter, due mainly to onetime junket grand opening events in the second quarter of 2018, which drove up VIP revenue.
Mass table and gaming machine sales increased in the third quarter due to a number of new marketing initiatives related to loyalty programs and promotions.
Looking ahead, Universal said it sees the tightening of requirements in the pachislot and pachinko industry in Japan as an opportunity to create more innovative titles. “Demand for new machines is currently sluggish at pachinko halls because of uncertainty about how people will respond to new titles that comply with the new rules fo pachislot and pachinko,” wrote the company in a filing.
“Universal Entertainment views these changes in market conditions and the environment for developing new titles as an excellent opportunity. Activities will be focused on the creation of highly innovative appealing titles that can be enjoyed by a broad spectrum of pachislot and pachinko fans.”
At Okada Manila, Universal says it will continue to expand attractions and amenities at the resort.
“In the fourth quarter, additional hotel rooms are expected to open. This will help support continued growth in the casino business as well as better position the resort to host large group events and foreign tour groups,” said the company. “VIP casino revenues are expected to continue growing driven by the addition of new junkets, and improved room supply and amenities attracting more demand from existing junkets.”
The company also says it expects mass market table and gaming machine revenue to continue growth as marketing initiatives continue to be implemented and improved as the property continues to ramp up. (AGB)