Universal Entertainment (6425) Q2 2024 earnings summary

Executive summary

• Net sales for the first half of 2024 were ¥62,907 million, down 20.7% year-over-year; net income attributable to owners of parent fell 97.5% to ¥525 million.

• Operating profit decreased 69.6% to ¥3,264 million, and ordinary profit dropped 80.4% to ¥5,567 million compared to the same period last year.

• Declines were driven by lower sales in both Amusement Equipments and Integrated Resort segments, with the latter impacted by a slowdown in the junket business in the Philippines.

Financial highlights

• Gross profit for the first half was ¥38,842 million, down from ¥43,858 million year-over-year.

• Cash and cash equivalents at June 30, 2024, totaled ¥34,278 million, a decrease of ¥9,912 million from year-end 2023.

• Net assets increased to ¥394,269 million, up ¥5,881 million from December 2023, mainly due to retained earnings and foreign currency translation adjustments.

• Total assets rose to ¥650,433 million, up ¥22,426 million from year-end 2023, reflecting yen depreciation and increased receivables and loans.

• Interim dividend of ¥30 per share (totaling ¥2,324 million) was approved, payable September 30, 2024.

Outlook and guidance

• The amusement machine industry is expected to improve as smart Pachislot and Pachinko machines gain market share.

• Integrated Resort Business aims to attract more domestic and international guests, with marketing efforts targeting tourists from Japan, South Korea, and Southeast Asia.

• Philippine tourism is forecasted to see double-digit growth in 2024, supporting the Integrated Resort segment.