Japan’s Universal Entertainment Corp, the ultimate parent company of Okada Manila operator Tiger Resort, Leisure and Entertainment Inc (TRLEI), says it expects to incur extraordinary losses of JPY1.6 billion (US$11.5 million) plus additional legal expenses in relation to the recent occupation of its Philippines integrated resort by representatives of company founder Kazuo Okada.
As widely reported by Inside Asian Gaming, the Kazuo Okada group forcibly took control of Okada Manila on 31 May in response to a Status Quo Ante Order (SQAO) issued by the Supreme Court of the Philippines ordering the TRLEI board be returned to its status of five years ago, before Mr Okada was removed due to allegations of fraud.
Mr Okada’s group retained control of the property for three months before the Universal-backed board returned the favor with a takeover of its own on 2 September. Mr Okada has since been arrested by Philippine authorities and charged with grave coercion, to which he has entered a plea of not guilty.
Publishing its 2Q22 financial results on Tuesday – coming some weeks after TRLEI released Okada Manila’s Q2 results – Universal revealed it “expects to incur a substantial amount of various expenses,” including litigation costs and advertising, in relation to the SQAO and repossession of the facility.
It also said it expects to incur extraordinary losses of JPY1.6 billion over and above such litigation and advertising expenses, emanating directly form the period of occupation of Okada Manila.
This, it said, will ultimately impact Universal’s financial results in 2022.
“Under these circumstances the growth in operating income ordinary income and net income attributable to owners of the parent are relatively modest compared to the increase in sales because of the aforementioned expenses and extraordinary losses,” it said.
Universal, which has also delayed publication of its 3Q22 results until mid-December as a result of the Okada Manila occupation and subsequent issues in settling its accounts, reported a 97% year-on-year increase in net sales to JPY56.3 billion (US$405 million) in 2Q22, with net income of JPY6.77 billion (US$49 million) reversing a loss of JPY16.9 billion (US$121 million) during the same period last year.
Those results included a 95% increase in net sales in its pachinko and pachislot business to JPY27.3 billion (US$196 million), with segment profit of JPY5.14 billion (US$37 million).
TRLEI previously reported gross gaming revenue of Php8.30 billion (US$142.6 million) and Adjusted EBITDA of Php2.18 billion (US$37.5 million) at Okada Manila in the three months to 30 June 2022, up 37.7% and 89.0% respectively on Q1.
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