The rating agency said the company’s EBITDA has been significantly below expectations.
The Philippines.- S&P Global Ratings has downgraded Universal Entertainment (UE) from B to B-. It said the company’s EBITDA had been “significantly below” expectations due to the underperformance of its Philippine casino resort, Okada Manila, which it owns through subsidiary Tiger Resort, Leisure and Entertainment (TRLE).
S&P Global said EBITDA is highly likely to remain below its previous forecast after Universal revised downward its earnings forecast last month. It indicated that an upgrade is unlikely in the near term, as the recovery of profits from the company’s gaming machine and casino resort operations are expected to take time to arrive.
“The outlook is stable, based on our view that the likelihood of a significant deterioration in liquidity is low for the time being, and that the cash flows and performance of core businesses will stabilise,” the agency said.
“In our estimation, UE’s companywide EBITDA will fall to about JPY18bn (US$115.2m) in 2025 from JPY21.2bn (US$135.7m) in 2024, when year-on-year performance had already deteriorated significantly. We forecast EBITDA is likely to remain around JPY24bn-JPY25bn (US$153.6m – US$160m) for about one year from 2026. This is because the operating profit of its casino resort business in the Philippines has fallen into the red again due to intensifying competition, although its Japanese gaming machines business has recovered to a certain extent.”
S&P Global noted that TRLE’s gross gaming revenue has seen double-digit declines for consecutive years amid “sluggish performance of its major VIP customer services from a decrease in the number of overseas tourists from China and other regions to the Philippines.” It also faces tough competition.
“We expect the company to aim to restore and stabilise performance by trying to attract customers. We expect visitor numbers will recover, but profitability will likely deteriorate due to increased marketing expenses”, the agency said.
It also expects the company’s Japanese gaming machines business to remain hard to predict as the “rate of compliance with model tests for new machines has been sluggish”.
The rating agency said the company’s EBITDA has been significantly below expectations. The Philippines.- S&P Global Ratings has downgraded Universal Entertainment (UE) from B to B-. It said the company’s…
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