Universal Entertainment Corporation has reported a significant decline in its financial performance for the second quarter of 2024, with both sales and profits falling sharply compared to the previous year.
The company attributes the downturn to its Amusement Equipments Business and Integrated Resort Business challenges, particularly at its flagship Okada Manila property.
Net sales for the quarter stood at JPY62.9 billion ($429.0 million), representing a 20.7 percent decrease year-on-year.
Operating profit saw a sharp drop of 69.6 percent, reaching JPY3.26 billion ($22.2 million), while ordinary profit plummeted by 80.4 percent to JPY5.57 billion ($38.0 million). The company’s net income attributable to owners of the parent also fell dramatically by 97.5 percent, amounting to just JPY525 million ($3.6 million).
In the Amusement Equipments Business, sales declined by 32.6 percent, totaling JPY20.76 billion ($141.6 million), with operating profit falling by 51.1 percent to JPY3.76 billion ($25.7 million). Despite the popularity of smart Pachislot machines, the performance of the Pachinko sector was notably weak.
The Integrated Resort Business also faced challenges, with net sales dropping by 13.1 percent to JPY41.68 billion ($284.3 million) and operating profit decreasing by 55.1 percent to JPY3.28 billion ($22.4 million).
The decline was primarily driven by a slowdown in the junket business and a reduction in VIP guest numbers at Okada Manila. Even though the mass market and gaming machine sectors performed steadily, they did not offset the overall decline in results.
The company also faced operational difficulties in its other business segments, with a 53.0 percent decrease in net sales to JPY202 million ($1.4 million) and a 10.0 percent drop in operating profit to JPY169 million ($1.2 million).
Universal Entertainment stated it is now focusing on enhancing its product offerings in the Amusement Equipments Business and intensifying its marketing efforts at Okada Manila.
The group has convened an extraordinary general shareholders’ meeting in September 2024 in which a vote will be held to decide if the group will dismiss former CEO, Jun Fujimoto, from its Board.
The decision comes after a Tokyo High Court ruling in August 2019 that found Fujimoto, who previously served as the company’s President and CEO, had breached his fiduciary duty by authorizing the transfer of nearly $43.5 million out of Universal Entertainment without proper justification and without adhering to internal decision-making procedures.
