S&P downgrades Universal Entertainment on ‘underperformance’ in Philippines
Written by admin on December 5, 2025
S&P Global Ratings lowers Universal Entertainment from B to B- due to its faltering Philippines casino business.
S&P Global Ratings Tuesday downgraded its rating for Japan’s Universal Entertainment Corp from B to B-. The agency noted that Universal EBITDA “has been significantly below our expectations due to persistent underperformance of its Philippine casino resort business”.
Universal subsidiary Tiger Resort Leisure & Entertainment Inc (TRLEI) operates Okada Manila, an integrated resort in Manila’s Entertainment City casino district.
TRLEI has posted double-digit year-on-year declines “for consecutive years”, S&P noted. It attributed the downturn to “sluggish performance of its major VIP customer services [and] a decrease in the number of overseas tourists from China and other regions. Operating profit has fallen into the red again due to intensifying competition.”
Entertainment City currently hosts three casino resorts: Okada Manila, Studio City Manila and Solaire. A fourth, Westside City Resorts World, will open in 2026. In addition, the Metro Manila area includes 20 smaller gaming halls.
Universal ‘stable’ heading into 2026
Despite the downgrade, S&P maintains a stable outlook for Universal, which also manufactures and sells pachislot and pachinko machines. “The likelihood of a significant deterioration in liquidity is low for the time being,” S&P said. “The cash flows and performance of core businesses will stabilize.”
The ratings agency expects company-wide EBITDA to fall to about JPY18 billion in 2025 from JPY21.2 billion in 2024. It forecasts EBITDA of around JPY24 billion to JPY25 billion in 2026.
It added that Universal’s Japanese gaming machine business “has recovered to a certain extent”. But sales are “hard to predict, as the rate of compliance with model tests for new machines has been sluggish. UE sales deteriorated significantly in 2024 as its new models failed to pass compliance testing.” Universal is expected to take steps to boost unit sales and profitability by developing new models and reselling past hit titles.
Universal’s debt load remains burdensome but is manageable in the near term, according to S&P. However, further deterioration in EBITDA or a drop in cash reserves below JPY25 billion could precipitate another downgrade.
