Universal Entertainment profits fall despite strong end to 2021

Japan-based gaming group Universal Entertainment Corporation (UEC) saw a fall in sales and profits as Covid-19 continued to impact Pachinko sales in its domestic market.

In its results for the fiscal year to 31 December 2021, the group announced consolidated sales of JPY90.4bn ($783.0m/£578.5m/€691.2m), which was down 0.5% from 2020.

The majority of sales came from its Amusement Equipment business, which includes the manufacture of Pachislot and Pachinko machines. This segment contributed JPY54.2bn, which was down 12.3% on the JPY61.8bn of 2020. The group said sales in 2020 had been high due to new titles in long-running brands, while it had followed a strategy of launching major titles in the fourth quarter of 2021 and the start of 2022.

Unit sales fell from 139,152 in 2020 to 127,094 in 2021, with the reduction in part due to Covid-19 restrictions in Japanese gaming halls.

UEC’s Integrated Resort business, which includes the Okada Manila property in the Philippines, saw an increase in revenue from JPY27.7bn to Y35.2bn. Its performance was hampered by Covid-19 restrictions in the country, though the business did launch online gambling during 2021.

Cost of sales grew by 7.6% to JPY43.9bn, leading to a gross profit of JPY46.5bn, which was 7.0% down from 2020. Amusement Equipment made a gross profit of JPY13.3bn, while high costs in Integrated Resorts led to a loss of JPY1.9bn.

Selling, general and administrative expenses were down 6.4% to JPY44.6bn, with a reduction in particular in marketing due to closed premises in its geographical locations. UEC announced an operating profit for 2021 of JPY2.0bn, which was down on JPY2.6bn in the previous year.

UEC reduced its ordinary loss compared to 2020 thanks to the weakening of the Japanese Yen in comparison to the US Dollar. Its ordinary loss was JPY2.5bn compared to JPY9.2bn in 2020.

Author: Raymond Fleming