Japanese gaming giant Universal Entertainment Corp reported a net loss attributable to owners of the company of JPY4.09 billion in 1Q19, a significant decline on profit of JPY181.4 billion in the prior year period due to troubled waters in its Amusement Equipment segment and high operating costs at Okada Manila.
While group-wide net sales grew 15.8% to JPY22.64 billion, driven by an 88.5% increase in net sales at Okada Manila to JPY16.77 billion, the IR ran at an operating loss of JPY513 million as it continues to enhance its facilities. Adjusted segment EBITDA soared, however, from JPY20 million in 1Q18 to JPY2,84 billion.
There were ongoing concerns for Universal’s Pachinko and Pachislot machines, with net sales falling 47.0% to JPY5.39 billion following the implementation from 1 February 2018 of tighter restrictions as part of measures to comply with the Basic Law on Measures against Gambling Addiction.
Addressing the decline, Universal said its customers are “continuing to use machines based on the previous rules, which have a deadline for removal” with the company currently “determining the ability to attract customers after switching to models complying with the new regulations. As a result, sales of Pachislot and Pachinko machines are currently sluggish.
“As these significant changes take place in Japan’s Pachislot and Pachinko sector, Universal Entertainment is focusing on the development of innovative models with outstanding gaming playing enjoyment and compliance with the revised rules in order to increase the vitality of the Pachislot and Pachinko market.”
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