Global Entertainment declared that its earnings for the initial six months of the year climbed by 24.9% compared to the same period last year. This growth was fueled by robust sales of pachinko and pachislo machines, which balanced out the decrease in income from its integrated resorts in the Philippines.
The company’s total revenue for the six-month period ending on June 30 reached 65.65 billion yen (£471.8 million/€524.6 million/$621.3 million). This was driven by a 141.8% surge in sales from Universal Entertainment’s amusement equipment division, reaching 48.9 million yen.
Equipment sales experienced a significant drop in the second quarter due to the mandated closure of pachinko parlors as a consequence of the novel coronavirus (COVID-19) pandemic. Only 11 machines were sold in the quarter, resulting in a total of 3,890 machines sold in the first half of the year.
However, this downturn was counterbalanced by a surge in sales of pachislo machines, a game that combines elements of pachinko and slot machines. Sales of these machines soared to 57,949 units in the second quarter, bringing the total for the first half to 106,701 units. In the entirety of 2019, 59,143 machines were sold.
However, for the integrated resort business, net sales (total revenue minus gaming taxes and winnings) decreased by 48.8% compared to the same period last year, reaching 16.1 billion yen.
Okada Manila, a lodging establishment situated in Manila, Philippines, has been shut down since March 15th due to the COVID-19 outbreak. The gambling establishment is anticipated to resume operations in the middle of August, as the situation in Manila is particularly dire.
Universal Entertainment’s primary revenue source stems from its media content operations, which develop free-to-play content, encompassing Slots Street social gambling games and console games, totaling 649 million yen.
The cost of revenue for the initial six months of the year witnessed a slight uptick, increasing by 4.2% to 26.69 billion yen, while gross profit surged by 44.7% to 38.96 billion yen. Selling, administrative, and general expenses for the first half of the year experienced a decline of 14.6% to 26.29 billion yen, leading to an operating profit of 12.67 billion yen, in contrast to a loss of 3.85 billion yen during the corresponding period last year.
Universal Entertainment also recorded 8.55 billion yen in non-operating income (down 24.4%), encompassing interest and dividend income, as well as profit sharing from agreements.
The business also recorded 6.19 billion yen in non-operating expenses, such as foreign exchange losses and interest expenses, resulting in a pre-tax profit of 3.45 billion yen after deducting 3.89 billion yen in non-recurring losses associated with the closure of Okada Manila.
Universal Entertainment’s tax contribution for the six-month period amounted to 44 million yen, with a tax burden of 452 million yen offset by 408 million yen in deferred taxes, culminating in a net profit of 3.41 billion yen for the first half of the year, in comparison to a loss of 9.04 billion yen in 2019.
Image: Tomas Cermak from Freeimages.com
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