Okada Manila Prepares to List on the Nasdaq through SPAC
One of the Philippines largest and most profitable casinos is preparing to list on the Nasdaq exchange following a strong period of earnings growth. The recovery is being fueled by a relaxation of the COVID measures in place for international arrivals. As is the case with the majority of Asian casinos, a lack of international visitors can seriously undermine long-term viability, so this step taken by the Philippines government is very well received by casino bosses in the region.
Okada Manila is the latest casino resort in the city to capture the attention of foreign investors. Now with the SPAC listing on the Nasdaq exchange, Okada stands to profit immensely from fresh investment and favorable market conditions. ©AGDProductions/Pixabay
Okada has been posting a strong performing business since the turn of 2021, recording a 24% growth on its top-line to $400 million. Contributions from its combined business were the main reasons for the great return, with the retail, entertainment, and dining outlets proving to be the cornerstone of the earnings. The parent company for Okada is a Tokyo listed group named Universal Entertainment, and in their latest report operating losses were shown to be narrowed by more than 4x to $16 million, a very encouraging sign of greater stability in cost management at the casino.
As with the rest of the industry, it is hard to make concrete assumptions on how things will ultimately turn out across the international gaming sector, Okada Manila remains bullish on post-COVID growth in its business. There appears to be a pent-up travel demand across the world, and when the world begins to open, wealthy internationals will once again frequent the resort as the main port-of-call on their vacations.
With a massive operating budget of more than $3 billion, Okada Manila has progressively strengthened the offerings at its owned and operated properties. The firm has over 35,000 square meters of gaming space, offering 600 gaming tables and more than 4,000 electronic gaming machines. Both quantities are expected to more than double when the latest round of construction is finished. Moreover is a renewed commitment to expanding the hospitality aspects of Okada, complete with world-class dining options, indoor beach clubs, and exceptional décor.
Okada Manila Targets $500 million EBITDA by 2025
The pent-up demand in the gambling sector has been causing incredibly ambitious investors to identify the sector as one of the strongest prospects out of all industries. Equities have already begun rebounding in recent months, and as the borders at locked down countries begin to open up we’re seeing this surge in value materialize. Evidence of this is already clear in cities like Las Vegas, which following the end of lockdown restrictions in 2021 had its absolute strongest financial year ever, even despite business and convention travel being below its average levels.
The enormous gross gaming revenue captured by Las Vegas in 2021 of $13.4 billion has given Asia’s casinos a serious appetite to re-open and get back to business as usual. As vaccination programs reach their maximum rollout phase and COVID cases across the world plateau, there is an anticipation that 2019 levels will soon be exceeded. It may not happen this year in 2022, perhaps not in 2023 either, but by 2024/2025 financial analysts have pegged Okada Manila to post EBITDA in excess of $500 million.
All of this financial performance will be under the guidance and operational leverage of a special purpose acquisition company, Capital Acquisition Corp. The SPAC merged with Okada Manila in a deal that values the casino resort at $2.6 billion, and as part of the transaction, the casino receives more than $275 million in cash to pursue immediate growth opportunities that may arise before earnings can be bolstered.
A major aspect of the merger will be the exposure Okada Manila will have to US investors. Universal Entertainment the Tokyo-listed parent company of Okada will become a listed entity on the Nasdaq. The growth opportunities that will arise from such a move are clear to see, and the company could easily transform from a single-asset business model to one that leverages on multiple assets with a lucrative range of cash-generating services.
