Universal Entertainment (UE), Japan's leading casino company, achieved a profit of $86.5 million for the year ended December 31, 2022, after posting a deficit of $144 million in 2021. The profit for 2022 was the result of normal operating conditions that resumed at the company's integrated resort of Okada Manila, the Philippines, as well as a significant inflow from the conversion of its Pachinko and Pachislot supply business to new machines and exchange rates.
Operational Growth:
Universal Entertainment reported consolidated net income of 11.5 billion yen ($86.5 million), compensating a significant portion of its 2021 loss to the level of 19.1 billion yen ($144 million), according to Inside Asian Gaming. In 2022, the company's net sales grew 55.9% to reach 141 billion yen ($1.06 billion) and led its operations to a profitable end of the year.
Compensation for Okada Manila:
Universal's overrun of $1 billion in overall handles included a surge in net sales at Okada Manila to 71.8 billion yen ($540 million), up 103.7%. Okada Manila Resort's 2022 earnings covered a full loss of 1.87 billion yen ($14.1 million) from the property in 2021 with an operating profit of 3.78 billion yen ($28.4 million). In addition, adjusted segment EBITDA increased 263% to reach the 19.4 billion yen ($146 million) level.
Busy market segments:
The Japanese operator attributed the large-scale activity in this market segment to revenue growth. In addition, Universal Entertainment considers demand for Pachinko and Pachislot machines to have been lower than expected in 2022 due to COVID-19-related restrictions, the sources said. However, the operator said the utilization rate of the machines recovered in 2022 was going beyond what limited the market for these machines to a comfortable area of profitability.
New computers with key recovery drivers:
Commenting on the resumption of operations, the company said: "This recovery is the result of a full transition to a new compliant machine and the beginning of the full-scale introduction of new 6.5 compliant Pachislot machines and smart Pachislot machines with new gameplay characteristics."
The transition to new machines in a given market segment resulted in a 26.0 percent increase in Universal's net sales to 68.3 billion yen ($514 million). As a result, the company's operating profit in the segment rose 48.9 percent to 19.8 billion yen ($149 million) to prove that the transition to new machines was an appropriate step for the casino giant to witness a full recovery and resume the profitability of its operations. UE also reported that the group gained more than 10 billion yen ($75.2 million) from the exchange rate between the weak yen and the strong U.S. dollar, confirming that several factors contributed to Universal Entertainment's overall operational recovery.
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