Okada Manila update: Merger with US SPAC delayed, first quarter 2022 adjusted earnings rises 66%
Okada Manila update: Merger with US SPAC delayed, first quarter 2022 adjusted earnings rises 66%
The ongoing family, management, and legal feud is over who gets to control the 'goose' that lays 60% of Universal Entertainment's 'golden eggs.'
Recap
On October 15, 2021, Japanese-owned and operated casino resort OKADA MANILA agreed to merge with 26 Capital, a Nasdaq-listed US special purpose acquisition company (SPAC), in a deal worth $2.6 billion, by June 30, 2022.
On May 31, 2022, however, a group led by the 79-year old Japanese billionaire Kazuo Okada, who made his fortune by manufacturing pachinko slot machines and founded Universal Entertainment, stormed his namesake Okada Manila casino in what became a headline-grabbing and social media-trending hostile takeover of its management and operations.
Backgrounder: The $2.6 billion Okada family feud
Merger update
On June 10, 2022, Okada Manila’s ultimate parent, Universal Entertainment, announced that the merger deadline with 26 Capital will be moved to September 30, 2022.
The ongoing family, management, and legal feud is over who gets to control Okada Manila — the ‘goose’ that lays 60% of Universal Entertainment's ‘golden eggs.’
What are the coveted ‘goose’s golden eggs’ that have been laid and are expected to be laid?
Okada Manila first quarter 2022 results
Property visitors: 707,459 (up 24% from 1Q 2021)
Total revenue: ₱6.398 billion or $117.9 million (up 21% from 1Q 2021)
Gross gaming revenue: ₱6.024 billion or $111 million (up 18% from 1Q 2021)
VIP table games: ₱2.540 billion (up 20% from 1Q 2021)
Mass market table games: ₱1.534 billion (up 40% from 1Q 2021)
Gaming machines: ₱1.950 billion (up 3% from 1Q 2021)
Other revenue (hotel, food & beverage, retail, entertainment, etc.): ₱374 million or $6.9 million (up 127% from 1Q 2021)
Hotel average daily room rate (ADR): ₱8,538 (up 9% from 1Q 2021)
Hotel occupancy rate: 82.5% (up 10% from 1Q 2021)
Revenue per available room (RevPAR): ₱7,046 (up 20% from 1Q 2021)
Adjusted earnings (EBITDA): ₱1.151 billion or $21.2 million (up 66% from 1Q 2021)
Okada Manila full year 2021 results
Property visitors: 1,846,031
Total revenue: ₱19.696 billion or $362.9 million (up 13% from 2020)
Gross gaming revenue: ₱18.918 billion or $348.5 million (up 13% from 2020)
VIP table games: ₱9.620 billion
Mass market table games: ₱3.814 billion
Gaming machines: ₱5.484 billion
Other revenue (hotel, food & beverage, retail, entertainment, etc.): ₱778 million or $14.3 million (up 22% from 2020)
Hotel average daily room rate (ADR): ₱8,018
Hotel occupancy rate: 75.4%
Revenue per available room (RevPAR): ₱6,047
Adjusted earnings (EBITDA): ₱2.372 billion or $43.7 million (up from a loss of ₱1.368 billion or $25.2 million in 2020)
Okada Manila full year 2022 projections
Total revenue: ₱45.860 billion or $845.1 million (up 133% from 2021)
Gross gaming revenue: ₱43.250 billion or $797.0 million (up 129% from 2021)
VIP table games: ₱16.931 billion
Mass market table games: ₱13.083 billion
Gaming machines: ₱12.660 billion
iGaming (New): ₱575 million
Other revenue (hotel, food & beverage, retail, entertainment, etc.): ₱2.610 billion or $48.1 million (up 236% from 2021)
Adjusted earnings (EBITDA): ₱13.051 billion or $240.5 million (up 450% from 2021)
Let’s hope that the ongoing feud doesn’t end up killing the ‘golden goose.’
1 PH₱ = US$0.018
The author does not own shares of any of the above-mentioned companies. He enjoys analyzing and estimating the true or intrinsic value of businesses. This post is excerpted, edited, and sourced from 26 Capital, Okada Manila, Universal Entertainment, company filings, and S&P Global Market Intelligence. The content is for general informational and entertainment purposes only and should not be construed as investment advice.