In Japan and prominent pachinko operator Okura Holdings Limited has reportedly issued a profit warning amid news that it is expecting to register an 83% comparable decline in earnings before tax for the eleven months to the end of May.
According to a report from Inside Asian Gaming, the Hong Kong-listed firm used an official Tuesday filing to announce the anticipated drop and advise investors ‘to exercise caution when dealing in the shares of the company’. The firm purportedly chalked up an around $9.2 million profit for the whole of its previous financial year although the caution has subsequently raised fears that it may now struggle to top $2 million.
Inside Asian Gaming reported that Okura Holdings Limited is responsible for 17 pachinko halls in Japan and raised the ire of many locals when it kept these facilities open even after the nation was put into a coronavirus-related state of emergency from April 7. The source detailed that the firm later suspended operations at its venues in Yokohama and Tokyo before eventually shuttering all of its remaining properties a little over a week later.
In the filing, the pachinko operator reportedly declared that the predicted decrease in its annual earnings is ‘mainly attributable’ to a decline in revenues brought about by the temporary closure of these facilities. The firm purportedly stated that it is moreover expecting ‘to record impairment losses on its property, plant and equipment and right-of-use assets’ for the twelve months to the end of June.
Reportedly read the filing from Okura Holdings Limited…
“Depending on the group’s financial and operating results for June, which may affect the extent of impairment losses to be recognized, the group’s financial performance for the year ending June 30 may deteriorate further and the directors anticipate that the group’s performance for the fiscal year will decline significantly as compared with that for the year ended on June 30 of 2019. The company is still assessing the amount of impairment losses.”