Universal Entertainment Corp. (UE) has revised its 2025 earnings forecast downward, signaling a challenging year ahead for the company. The gaming and entertainment giant, which operates casinos and gaming machines in both Japan and the Philippines, has seen its EBITDA expectations for 2025 fall significantly. According to analysts from S&P Global Ratings, UE’s company-wide EBITDA is expected to drop to ¥18 billion (US$115 million) in 2025, down from ¥21.2 billion in 2024. Despite efforts to stabilize its core operations, the company faces continued headwinds, with a recovery forecasted to remain sluggish until 2026.
Casino Resort Business Struggles in the Philippines
The most significant contributor to the company’s downturn is its casino resort operations in the Philippines, specifically Tiger Resort, Leisure and Entertainment Inc., UE’s subsidiary. The casino resort has faced a steady decline in gross gaming revenue (GGR), with double-digit declines year-on-year for several consecutive periods. This decline has been driven by reduced VIP customer activity, fewer international visitors—particularly from China—and increasing competition within the local casino market.
S&P Global expects the casino resort’s EBITDA to fall to ¥12 billion in 2025, a substantial drop from the ¥19 billion recorded in 2024, which already marked a decline in performance. Despite these challenges, analysts remain cautiously optimistic about future recovery efforts. “The company will continue efforts to restore and stabilize performance, aiming to attract more customers, though profitability will likely remain pressured by higher marketing expenses,” said the report.
UE’s gaming machines division, operating in Japan, has also faced difficulties in the wake of its 2024 failure to pass compliance tests for new models. Sales within the division have been unpredictable, and while there is some expectation that the division may stabilize in the coming years, the forecast for 2025 remains modest. S&P Global anticipates EBITDA of approximately ¥12 billion in 2025, which is a substantial drop from the ¥25 billion generated in 2023.
Despite these challenges, the company’s gaming machines business is projected to see some recovery after 2025, with EBITDA likely to stabilize around ¥15 billion in 2026. However, even this stabilization would still represent only around 60% of the level seen in 2023.
Debt and Liquidity Concerns Remain
One of the major financial concerns for UE is its high debt load. The company’s debt-to-EBITDA ratio is expected to deteriorate to around 10x by the end of 2025, up from 8.9x at the end of 2024. This rise in the ratio signals a heavier burden for the company in terms of debt repayment and financial sustainability. S&P Global forecasts that this ratio will remain elevated for at least another year, even with a projected recovery in EBITDA from 2026 onward.
Despite these concerns, the company’s liquidity is considered manageable in the short term. UE’s cash and deposits grew to ¥27.4 billion by the end of September 2025, up from ¥21.2 billion at the end of March 2025, largely due to asset sales and compensation payments. With relatively low debt maturities expected over the next 12 months—between ¥1 billion and ¥2 billion—the company should be able to maintain liquidity without facing immediate financial distress.
While the company’s financial situation remains under pressure, S&P Global maintains a stable outlook for UE, acknowledging that the company has implemented measures to stabilize its key businesses. However, the agency has warned that further deterioration in EBITDA or a drop in cash reserves below ¥25 billion could lead to a downgrade. Given the slow recovery trajectory of both UE’s gaming machine and casino resort businesses, the likelihood of an upgrade is low in the near term.
