Japan’s Universal Entertainment Corporation says it expects the impending opening of another batch of hotel rooms at its Philippines integrated resort, Okada Manila, to drive a significant increase in revenue following a sequential decline in net sales in 3Q18.
Universal announced its third quarter results late Friday, with net sales – categorized as gross gaming revenue minus taxes and jackpots – for the period down 4.3% to JPY12.19 billion (US$107.9 million) and operating loss increasing 7.8% to JPY1.74 billion (US$15.4 million).
The sales decline was attributed to higher VIP table game revenue in the prior quarter due to a “one-time temporary spike in volumes due to junket grand opening events.”
However, Universal said that the one-time VIP spike aside, sales actually increased in 3Q18 on the back of new marketing initiatives and the improved operation of gaming tables and slot machines. It added that Okada Manila now has the highest number of installed tables and machines in the Philippines, helping drive significant growth in Adjusted EBITDA to JPY1.08 billion, up from JPY269 million in the second quarter and JPY20 million in the first quarter of 2018.
“The increase in the adjusted segment EBITDA is attributed to increasing gross gaming revenues from the first quarter to the third quarter and greater proportion of higher margin mass market gross gaming revenues,” Universal stated.
More importantly, the company expects revenues to continue heading north as the year winds down as more of its 1,000 hotel rooms come online, with only around 500 currently operational.
“We will continue to expand attractions and amenities with the highest priority,” Universal said. “In the fourth quarter of 2018, additional hotel rooms are expected to be open. This will help support continued growth in the casino business as well as better position the resort to host large group events and foreign tour groups.
“VIP casino revenues are expected to continue growing driven by the addition of new junkets, and improved room supply and amenities attracting more demand from existing junkets.
“Mass market table and gaming machine revenue is expected to continue growing as marketing initiatives continue to be implemented and improved and the property continues to ramp up. Increasing number of hotel rooms, retail outlets and other amenities is expected to drive additional visitation and mass market casino revenues.”
Universal last week released its October gaming figures for Okada Manila, with GGR reaching Php2.68 billion (US$51 million) and Adjusted EBITDA at Php370.6 million (US$7 million) – both the highest of any month since Okada Manila opened in late 2016.
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