Universal Entertainment Corporation (UEC), a Japan-based gaming group, experienced a decline in sales and profits due to the ongoing impact of the COVID-19 pandemic on the domestic Pachinko market. Despite challenges, the company’s Integrated Resort business, including the Okada Manila property, saw increased revenue. However, the Amusement Equipment segment, which manufactures Pachislot and Pachinko machines, faced a decrease in sales.
Consolidated Sales and Segment Performance:
In the fiscal year ending on 31 December 2021, UEC reported consolidated sales of JPY90.4bn ($783.0m/£578.5m/€691.2m), representing a marginal decline of 0.5% compared to 2020. The majority of sales were derived from the Amusement Equipment business, contributing JPY54.2bn, a decrease of 12.3% from JPY61.8bn in 2020. The decline in sales was attributed to lower unit sales, primarily due to COVID-19 restrictions impacting Japanese gaming halls. In contrast, the Integrated Resort business, including Okada Manila, experienced revenue growth from JPY27.7bn to JPY35.2bn despite challenges posed by COVID-19 restrictions in the Philippines.
Gross Profit and Expenses:
UEC’s cost of sales increased by 7.6% to JPY43.9bn, resulting in a gross profit of JPY46.5bn, down 7.0% from 2020. The Amusement Equipment segment achieved a gross profit of JPY13.3bn, while high costs in the Integrated Resorts business led to a loss of JPY1.9bn. Selling, general, and administrative expenses decreased by 6.4% to JPY44.6bn, mainly due to reduced marketing activities resulting from closed premises in various locations. The company reported an operating profit of JPY2.0bn for 2021, a decline compared to JPY2.6bn in the previous year.
Reduction in Ordinary Loss:
UEC managed to reduce its ordinary loss in 2021, primarily due to the weakening of the Japanese yen against the US dollar. The ordinary loss for the year was JPY2.5bn, significantly lower than the JPY9.2bn recorded in 2020.
Universal Entertainment Corporation faced challenges in its Amusement Equipment segment due to the impact of COVID-19 on the Pachinko market. However, the company’s Integrated Resort business demonstrated resilience, with Okada Manila experiencing revenue growth. Despite a decrease in sales and profits, UEC managed to reduce its ordinary loss, benefiting from currency fluctuations. As the industry continues to navigate the effects of the pandemic, Universal Entertainment Corporation remains committed to adapting its strategies and overcoming obstacles to drive future growth.