Quarterly Report
(This is an English translation of the "Shihanki-Hokokusho"
for the first quarter of the 52nd period)
From January 1, 2024 to March 31, 2024
UNIVERSAL ENTERTAINMENT CORPORATION
Ariake Frontier Building Tower A,
7-26, Ariake 3-chome,Koto-ku, Tokyo
Contents | Page | |
Cover | ||
Part I | Company Information | 1 |
Section 1. | Overview of the Company | 1 |
1. | Transition of Significant Business Indicators, etc | 1 |
2. | Description of Businesses | 1 |
Section 2. | Business | 2 |
1. | Business and Other Risks | 2 |
2. | Management's Analyses of Financial Status, Operating Results and Cash Flows | 2 |
3. | Important Contracts, etc., in Operations | 4 |
Section 3. | Situation of the Company | 5 |
1. | Details of Stock, etc | 5 |
(1) | Total Number of Shares, etc | 5 |
(2) | Share Acquisition Rights | 5 |
(3) | Exercise Status, etc., of Bonds with Share Acquisition Rights with a Clause to Revise the | |
Exercise Price | 5 | |
(4) | Transition of Total Number of Issued Shares and Amount of Share Capital | 5 |
(5) | Major Shareholders | 5 |
(6) | Voting Rights | 6 |
2. | Directors and Auditors | 6 |
Section 4. | Accounting | 7 |
1. | Quarterly Consolidated Financial Statements | 8 |
(1) | Quarterly Consolidated Balance Sheet | 8 |
(2) | Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of | |
Comprehensive Income | 10 | |
Quarterly Consolidated Statement of Income | 10 | |
Quarterly Consolidated Statement of Comprehensive Income | 11 | |
2. | Others | 17 |
Part II | Information on Guarantee Companies, etc., for the Company | 18 |
[Quarterly Review Report] | ||
[Written Confirmation] |
Cover
Submitted document | Quarterly Report |
Statutory basis | Article 24-4-7, Paragraph 1 of the Financial Instruments and Exchange Act |
of Japan | |
Agency receiving submission | Director-General of the Kanto Local Finance Bureau |
Submission date | May 14, 2024 |
Quarterly accounting period | The first quarter of the 52nd period |
(from January 1, 2024 to March 31, 2024) | |
Corporate name | Kabushiki-gaisha Universal Entertainment |
Name in English | Universal Entertainment Corporation |
Name and position of representative | Hajime Tokuda, Representative Director and President |
Location of headquarters | Ariake Frontier Building Tower A, 7-26, Ariake 3-chome,Koto-ku, Tokyo |
Phone | +81-3-5530-3055 |
Name of contact person | Kenshi Asano, Managing Director and CFO |
Closest contact address | Ariake Frontier Building Tower A, 7-26, Ariake 3-chome,Koto-ku, Tokyo |
Phone | +81-3-5530-3055 |
Name of contact person | Kenshi Asano, Managing Director and CFO |
Place available for public inspection | Tokyo Stock Exchange, Inc. |
(2-1, Nihombashi Kabutocho, Chuo-ku, Tokyo) |
Universal Entertainment Corporation (Securities code: 6425)
Quarterly Report
Part I. Company Information
Section 1. Overview of the Company
1. Transition of Significant Business Indicators, etc.
The Cumulative | The Cumulative | |||
Term | First Quarter of the | First Quarter of the | 51st Period | |
51st Period | 52nd Period | |||
Accounting period | From January 1, 2023 | From January 1, 2024 | From January 1, 2023 | |
to March 31, 2023 | to March 31, 2024 | to December 31, 2023 | ||
Net sales | (Million yen) | 35,502 | 34,427 | 178,995 |
Ordinary profit | (Million yen) | 3,159 | 5,575 | 38,080 |
Net income attributable to | (Million yen) | 2,946 | 3,450 | 28,439 |
owners of parent | ||||
Comprehensive income | (Million yen) | 10,714 | 10,745 | 42,161 |
Net assets | (Million yen) | 360,030 | 399,134 | 388,388 |
Total assets | (Million yen) | 600,972 | 647,618 | 628,006 |
Net income per share | (Yen) | 38.02 | 44.53 | 367.04 |
Diluted net income per share | (Yen) | 38.02 | 44.53 | 367.00 |
Ratio of shareholders' equity | (%) | 59.9 | 61.6 | 61.8 |
Note: As the Company has prepared quarterly consolidated financial statements, the transition of significant business indicators, etc. of the Company is not indicated.
2. Description of Businesses
During the cumulative first quarter of 2024, there were no significant changes in the businesses of the Company group (the Company and its affiliated companies), and there were no changes in main affiliated companies.
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Quarterly Report
Section 2. Business
1. Business and Other Risks
During the cumulative first quarter of 2024, there were no significant changes in the business and other risks stated by the Company group in the Securities Registration Report for the previous fiscal year.
2. Management's Analyses of Financial Status, Operating Results and Cash Flows
Matters regarding the future as stated in the following text are based on judgments as of the closing date of the first quarter of 2024.
(1) Financial Status and Operating Results
(Million yen) | ||||
Cumulative first quarter of 2024 | Net sales | Operating profit | Ordinary profit | Net income attributable |
to owners of parent | ||||
Non-consolidated | 14,379 | 2,255 | 4,387 | 2,303 |
Consolidated | 34,427 | 4,023 | 5,575 | 3,450 |
Financial status at the end of the first quarter of 2024 is as follows.
Total assets at the end of the first quarter of 2024 amounted to 647,618 million yen, an increase of 19,611 million yen from the end of 2023. There was an increase in non-current assets as the yen depreciated relative to the Philippine peso, an increase in receivables owed by a non-consolidated subsidiary, and an increase in loans to equity-method affiliates.
Liabilities at the end of the first quarter of 2024 amounted to 248,484 million yen, an increase of 8,865 million yen from the end of 2023. There was a decrease resulting from repayments of long-term borrowings at consolidated subsidiaries, an increase in deferred tax liabilities, an increase in lease obligations as the yen depreciated relative to the Philippine peso, and an increase in current portion of bonds due to the yen's decline vs. the U.S. dollar.
Net assets at the end of the first quarter of 2024 amounted to 399,134 million yen, an increase of 10,745 million yen from the end of 2023. This was mainly the result of an increase in retained earnings due to net income attributable to owners of parent, which was partially offset by an increase in foreign currency translation adjustment because of the yen depreciated against the Philippine peso.
Operating results for the cumulative first quarter of 2024 is as follows.
In the Amusement Equipments Business, 28,014 units were sold during the first quarter, 3,111 more than during the first quarter of 2023. This increase is partly attributable to the consistently strong performance of new smart Pachislot machines, which are meeting the expectations of pachinko hall operators. In the Integrated Resort Business, market conditions were affected by the slowdown in the junket business. There was a foreign exchange gain in the first quarter due in part to the yen's depreciation and strength of the U.S. dollar. However, interest income from U.S. dollar denominated bonds increased because of the dollar's strength.
As a result, sales in the cumulative first quarter of 2024 totaled 34,427 million yen, down 3.0% from the first quarter of 2023. Operating profit decreased 15.5% to 4,023 million yen, ordinary profit increased 76.5% to 5,575 million yen, and net income attributable to owners of parent increased 17.1% to 3,450 million yen. Business segment performance was as follows. Sales are prior to adjustments for inter-segment sales or transfers.
i. Amusement Equipments Business
In the cumulative first quarter of 2024, the Amusement Equipments Business posted net sales of 13,862 million yen, an increase of 24.4% year on year, and an operating profit of 3,929 million yen, an increase of 26.7% year on year.
In the amusement machine industry, the consistently strong performance of smart Pachislot machines is meeting the expectations of pachinko hall operators. Sales of these machines are strong too. In the Pachinko sector, deliveries machines with a "lucky trigger" function started in March 2024 and the use of Pachinko machines is recovering. As a result, there are signs that the Pachinko market will continue to improve.
During the first quarter, sales started for "WARD OF LIGHTS II," the latest member of the A PROJECT, "SLOT Ninja Jajamaru-kun," the latest member of the Family Slot Series that brings back popular games from many years ago, and "P YAJIKITA DOCHUKI KANMI ver.," which is a Pachinko machine. In addition, production has increased for two very
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Universal Entertainment Corporation (Securities code: 6425)
Quarterly Report
successful machines: "OKIDOKI! GOLD" and "SMART PACHISLOT Basilisk: The Kouga Ninja Scrolls Kizuna 2 Tenzen BLACK EDITION."
ii. Integrated Resort Business
The Integrated Resort Business posted net sales(1) of 20,375 million yen, a decrease of 15.5% year on year, and an operating profit of 1,770 million yen, a decrease of 57.2% year on year, in the cumulative first quarter of 2024. Adjusted segment EBITDA(2) was 6,026 million yen in the cumulative first quarter of 2024, a decrease of 24.0% year on year.
At OKADA MANILA, an integrated resort operated by the Universal Entertainment Group, first quarter performance was down from the first quarter of 2023. In the gaming category, the slowdown of the junket(3) business is affecting the overall environment for gaming. There was a sharp decline in VIP rolling chip volume and the winning rate at table games for VIPs decreased from 3.4% one year ago to 2.8%. The result was a downturn in gaming earnings. In the hotel management category, the average room price and room occupancy rate were about the same as one year earlier and there was a large number of guests. There have been no disruptions of operations following the resolution of the IT system problem that happened in the fourth quarter of 2023.
As a result, we recorded very high Adjusted segment EBITDA in the first quarter, showing steady recovery and growth from the recession caused by the pandemic.
- Net sales are gross revenues minus gaming taxes and jackpots.
- Adjusted segment EBITDA= Operating profit/loss + Depreciation + Other adjustments
- Junket operators act as a go-between for bringing VIP guests from many countries to casinos. Usually, these guests do not pay for travel, food and other expenses.
- Other
Other Business posted net sales of 153 million yen, a decrease of 15.3% year on year, and an operating profit of 114 million yen, a decrease of 27.6% year on year, in the cumulative first quarter of 2024.
In the Media Content Business, App Store and Google Play distribution started for the simulator app of "SMART PACHISLOT Puella Magi Madoka Magica The Movie Part 1 Beginnings/Part 2: Eternal forte," the latest addition to the Madoka Magica Series. "Slots Street," a social casino game where basic play is free, added a video slot game with designs based on "Continental XXXX" Pachislot machines, which raised the total number of games to 58. All services, including the addition of new titles, are aimed at attracting new users and increasing the satisfaction of current users.
(2) Management Policy and Strategy
There were no significant changes in management policy and strategy of the Company group during the cumulative first quarter of 2024.
(3) Operational and Financial Issues to Be Addressed
There were no significant changes in operational and financial issues to be addressed of the Company group during the cumulative first quarter of 2024.
(4) Research and Development Activities
The amount spent on the group-wide research and development activities during the cumulative first quarter of 2024 was 1,643 million yen. There were no significant changes in the status of research and development activities of the Company group during said period.
- Factors that May Exert Material Impact on Results of Business Operations As stated in "1. Business and Other Risks."
- Analyses of Sources of Capital and Liquidity of Funds
The primary demands for capital are construction expenses at OKADA MANILA, and material expenses, the cost of manufacturing, selling, general and administrative expenses in the Amusement Equipments Business, and other expenses for business operations. Research and development expenditures are major components of investing activities. Major sources of funds to meet this demand for capital are internal resources, private placement bonds and loans from financial institutions. At the end of the first quarter of 2024, bonds payable and borrowings (excluding lease obligations) and other interest-bearing liabilities totaled 126,001 million yen and cash and cash equivalents totaled 42,671 million yen.
- Current Situation and Outlook of Business Strategy
- Amusement Equipments Business
In the amusement machine industry, the Pachislot market share of smart Pachislot machines is increasing due to the
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Quarterly Report
consistently high utilization rate of these machines. In the Pachinko sector, the market is expected to continue improving as pachinko halls install smart Pachinko machines and machines with a lucky trigger function.
In the second quarter, sales have started of "OKI DOKI! BLACK," the latest addition to the important OKI DOKI! Series. In the Pachinko sector, installations of "PA HIGH SCHOOL FLEET ALL STAR sweet de happy! 2400" started and sales of "P GUILTY CROWN 2 PREMIUM LIVE TICKET" started.
Universal Entertainment will continue to work on developing unique and appealing titles. By creating and selling innovative and appealing machines, our goal is to play a role in energizing the entire amusement machine industry as we increase our share of this market.
(Reference) Number of Pachislot and Pachinko machines sold in 2024
1st quarter | 2nd quarter and after (estimated orders) | |
No. of machines sold | 28,014 | 22,100 |
Note: See "Supplementary Information on the Results of Operations for the First quarter of 2024" (https://www.universal-777.com/en/ir/library/result/)for more details.
ii. Integrated Resort Business
The number of foreign tourists in the Philippines in January and March 2024 was more than 20% higher than during the same period of 2023 according to the Philippine Department of Tourism.
To serve a larger number of guests, OKADA MANILA is recruiting and training people to strengthen marketing capabilities in the gaming business. One goal is to attract more people living areas of the Philippines other than Luzon Island, where Manila is located, to serve a broader range of guests who live in the Philippines. Measures to strengthen marketing activities also have the goal of attracting tourists from Japan, South Korea and Southeast Asian countries. In operations other than gaming, there is steady progress with making the OKADA MANILA brand more powerful. One example is the receipt of a Forbes Travel Guide 5-star award for the fifth consecutive year. Continuing to hold major events at the Crystal Corridor of OKADA MANILA is another activity for increasing the number of guests. Negotiations with financial institutions are still under way concerning the refinancing of Universal Entertainment overseas private placement bonds.
iii. Other
The Media Content Business will continue to distribute high-quality simulator applications and music on the App Store and Google Play. "Universal Kingdom," which has a monthly fee, and "Slots Street" social casino game, where basic play is free, will continue to improve services to increase user satisfaction.
3. Important Contracts, etc., in Operations
No decisions or conclusions of important contracts, etc. in operations were made during the first quarter of 2024.
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Universal Entertainment Corporation (Securities code: 6425) | ||
Quarterly Report | ||
Section 3. Situation of the Company | ||
1. Details of Stock, etc. | ||
(1) Total Number of Shares, etc. | ||
i. Total Number of Shares | ||
Classification | Total Number of Authorized Shares (Shares) | |
Common stock | 324,820,000 | |
Preferred shares | 40,000,000 | |
Total | 324,820,000 | |
Note: The total numbers of authorized shares are the authorized shares for each class in the Articles of Incorporation.
ii. Number of Issued Shares
Number of Issued Shares | Number of Issued Shares | Name of Listed Financial | ||
as of the Submission | Instruments Exchange | |||
as of the End of the First | ||||
Classification | Date of This Report | Market or Authorized | Remarks | |
Quarter (Shares) | ||||
(Shares) | Financial Instruments Firms | |||
(March 31, 2024) | ||||
(May 14, 2024) | Association | |||
Tokyo Stock Exchange, | Number of | |||
Common stock | 80,195,000 | 80,195,000 | shares for one | |
Standard Market | ||||
unit: 100 | ||||
Total | 80,195,000 | 80,195,000 | - | - |
Note: The shares issued upon the exercise of share acquisition rights from May 1, 2024 through the date of submission of this Quarterly Report are not included in "Number of Issued Shares as of the Submission Date of This Report."
- Share Acquisition Rights
- Stock Options
There is no applicable information.
ii. Other Share Acquisition Rights There is no applicable information.
(3) Exercise Status, etc., of Bonds with Share Acquisition Rights with a Clause to Revise the Exercise Price There is no applicable information.
(4) Transition of Total Number of Issued Shares and Amount of Share Capital
Change in Total | Balance of Total | Change in | Balance of | Change in | Balance of | |
Date | Number of | Number of | Legal Capital | Legal Capital | ||
Share Capital | Share Capital | |||||
Issued Shares | Issued Shares | Surplus | Surplus | |||
(Million yen) | (Million yen) | |||||
(Shares) | (Shares) | (Million yen) | (Million yen) | |||
From January 1, 2024 | - | 80,195,000 | - | 98 | - | 7,503 |
to March 31, 2024 | ||||||
(5) Major Shareholders | ||||||
No items have been indicated because this quarterly accounting period is the first quarter. |
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Quarterly Report
- Voting Rights
- Issued Shares
As of March 31, 2024
Classification | Number of Shares | Number of Voting Rights | Remarks | |
(Shares) | (Units) | |||
Shares without voting rights | - | - | - | |
Shares with limited voting rights (treasury | - | - | - | |
shares, etc.) | ||||
Shares with limited voting rights (others) | - | - | - | |
Shares with full voting rights (treasury | Common stock | 2,704,000 | - | - |
shares, etc.) | ||||
Shares with full voting rights (others) | Common stock | 77,469,100 | 774,691 | - |
Shares less than one unit share | Common stock | 21,900 | - | - |
Total number of issued shares | 80,195,000 | - | - | |
Voting rights of total shareholders | - | 774,691 | - |
Note: The common stock indicated in "Shares with full voting rights (others)" includes 400 shares of unknown holders' stock registered under the name of Japan Securities Depository Center, Inc.
The "Number of Voting Rights" includes four units of voting rights related to such shares with full voting rights under the name of Japan Securities Depository Center, Inc.
ii. Treasury Shares, etc.
As of March 31, 2024 | |||||
Number of | Number of | Total Number of | Holding Ratio to | ||
Owner's Name | Treasury Shares in | Treasury Shares in | |||
Owner's Address | Shares Owned | Total Number of | |||
or Title | Own Name | the Names of | |||
(Shares) | Issued Shares (%) | ||||
(Shares) | Others (Shares) | ||||
Universal | Ariake Frontier | ||||
Building Tower A, | 2,704,000 | - | 2,704,000 | 3.37 | |
Entertainment | |||||
7-26, Ariake 3-chome, | |||||
Corporation | |||||
Koto-ku, Tokyo | |||||
Total | - | 2,704,000 | - | 2,704,000 | 3.37 |
2. Directors and Auditors
There have been no changes in officers during the cumulative first quarter of 2024 since the Annual Securities Report for the previous fiscal year was submitted.
Changes in officers from the end of the cumulative first quarter of 2024 to the date of submission of this Quarterly Report are as follows.
Changes in Officers
New position | Previous position | Name | Date of change |
Managing Director | Director | April 1, 2024 | |
Representative Director and | Managing Director | Hajime Tokuda | April 26, 2024 |
President | |||
Representative Director | Director | Takako Okada | April 26, 2024 |
Managing Director and CFO | Director and CFO | Kenshi Asano | April 1, 2024 |
Director | Representative Director and | Jun Fujimoto | April 26, 2024 |
President, CEO and CIO | |||
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Universal Entertainment Corporation (Securities code: 6425)
Quarterly Report
Section 4. Accounting
1. Basis for Preparation of Quarterly Consolidated Financial Statements
The quarterly consolidated financial statements of the Company are prepared in accordance with the "Regulations Concerning the Terminology, Form, and Method of Preparing Quarterly Consolidated Financial Statements" (Cabinet Office Ordinance No. 64, 2007).
2. Audit Certificate
Pursuant to the provision of Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, the quarterly consolidated financial statements for the first quarter (from January 1, 2024 to March 31, 2024) and the cumulative first quarter (from January 1, 2024 to March 31, 2024) of 2024 have undergone a quarterly review by UHY Tokyo & Co.
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Universal Entertainment Corporation published this content on 14 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2024 08:07:09 UTC.