Global Entertainment: Total earnings decreased despite arcade sales growth, with integrated resort earnings falling – iGB
Japanese gaming content creator and integrated resort operator Global Entertainment witnessed a 17.5% annual decrease in earnings for the nine months ending September 30, with a dip in income from its Philippines integrated resort offsetting robust performance from its arcade business.
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Total earnings decreased despite arcade sales growth, with integrated resort earnings falling
Earnings for the initial three quarters of the year thus far reached JPY 77.14 billion (£555.3 million/€620.3 million/$732.4 million), with Global’s amusement machine business, which incorporates pachinko and pachislot sales, contributing JPY 55.55 billion, up 31.0% annually.
However, the division only contributed JPY 6.70 billion in the third quarter, a substantial annual drop.
This was driven by a strong first half, with sales more than doubling to JPY 48.85 billion, due to the launch of new pachinko equipment in the initial six months of 2020.
Global explained that the third-quarter decline was due to the coronavirus (COVID-19) pandemic, which has made pachinko parlor operators cautious about replacing existing machines with new ones.
The integrated resort division, which includes the Okada Manila resort in the Philippines, saw sales fall 58.6% to JPY 20.56 billion.
The estate was shut down in March and brought back to life in the middle of September.
Universal emphasized that despite being permitted to resume operations, its maximum capacity is still capped at 30%.
Other income streams, including its gaming and social gambling games, declined by 19.0% to 9.3 billion yen. Its “Your Husband!? Pluto” title proved “instantly popular,” while its Slots Street social gambling application launched Golden Hibiscus, its second slot machine developed in conjunction with Sega, following its 2019 release of a mahjong game.
Turning to expenditures, operating expenses decreased to 33.14 billion yen for the period, with gross profit at 44.01 billion yen, down by 9.1%. Sales, general and administrative expenses also decreased, bringing Universal’s nine-month net profit to 7.8 billion yen, an increase from 1.39 billion yen in the previous year.
After non-operating income of 13.2 billion yen and non-operating expenses of 95.2 billion yen, Universal recorded an operating loss for the period of 3.94 billion yen, a substantial reduction from the 64.6 billion yen loss in 2019.
When depreciation and amortization factors are taken into account, earnings before interest, taxes, depreciation and amortization (EBITDA) for the period was 208.1 billion yen, down by 2.8%.
Despite the substantial reduction in operating losses, the company subsequently recorded a non-recurring non-operating loss of 68.1 billion yen related to the closure of its Philippine property.
This resulted in a slight increase in pre-tax losses to 7 billion yen.
Although there was a minor decrease in tax postponement, the ultimate net loss still amounted to 68.1 billion yen, representing an 18.8% rise compared to the same period in the previous year.
Picture: Tomas Cermak, sourced from Freeimages.com
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