Okada Manila operator Universal Entertainment has been downgraded by analysts at S&P Global based upon ‘prospects of slow recovery’.
Despite the downgrade to ‘B-‘, the analysts indicate that the outlook for the operator remains stable.
According to a Tuesday note, the company’s ‘EBITDA has been significantly below our expectations due to persistent underperformance of it Philippine casino resort business’.
The analysts further noted that it expects the company’s main cash flor ratios ‘to remain at a significantly deteriorated level’.
Despite this, the group notes that ‘the likelihood of a significant deterioration in liquidity is low for the time being’.
The downgrade comes after Universal Entertainment significantly revised down its earnings forecast for this year in mid-November.
S&P analysts are now forecasting EBITDA to remain between JPY24-25 billion for about one year from 2026. The group indicates this is ‘because operating profit of its casino resort business in the Philippines has fallen into the red again due to intensifying competition, although its Japanese gaming machines business has recovered to a certain extent.’
A recovery in EBITDA from Okada Manila ‘will likely be delayed’, note the analysts, citing ‘sluggish performance of its major VIP customer services from a decrease in the number of overseas tourists from China and other regions to the Philippines’.
The group also notes that the company faces ‘stiff competition’ in the Philippine market, with expectations the company will ‘aim to restore and stabilize performance by trying to attract customers’.
An increase in marketing expenses is expected to contrast the recovery in visitor numbers, with expectations for Okada’s EBITDA to be around JPY12 billion this year and around JPY15-16 billion in 2026.
