Asian casino investor Bloomberry Resorts Corp posted a net loss in the year ending December 31, it said in a filing to the Philippine Stock Exchange on Friday.
The loss was PHP3.36 billion (US$72.8 million), compared to net profit of PHP4.07 billion in the year-prior period.
The firm developed and operates Solaire Resort and Casino (pictured) in Manila, the Philippines capital. It also operates Jeju Sun Hotel and Casino on Jeju Island in South Korea.
The firm said in its filing: “While [the] Philippine operation’s net revenues increased for the 12 months of 2015 by PHP715.3 million [to PHP24.84 billion], total expenses increased 40.1 percent to PHP25.21 billion… resulting in loss before taxes of PHP368.9 million, or 1.5 percent of net revenue for the 12 months ended December 31, 2015 compared to [a profit before tax of] PHP6.48 billion or 26.9 percent of net revenue for the same period last year.”
The firm added, referring to the country’s gaming regulator, the Philippine Amusement and Gaming Corp, known as Pagcor: “As a result of the Pagcor tax configuration, the net provision for the 12 months was PHP2.01 billion representing an effective income tax rate of negative 544.4 percent of income before tax compared to PHP2.41 billion in the prior year at an effective rate of 37.2 percent. As a result of these factors Philippine operations incurred a net loss of PHP3.37 billion [including non-controlling interests] for the 12 months compared to net income of PHP4.07 billion in the prior year.”
Earnings before interest, taxation, depreciation and amortisation nearly halved, to PHP5.18 billion, from PHP10.03 billion in the year-prior period, but return on equity was roughly stable, at 15.49 percent, compared to 15.86 percent in the prior year period.
Provision for doubtful accounts rose nearly threefold at nearly PHP2.57 billion, compared to PHP679.66 million in the year-prior period.
The company said: “The group evaluates provision for doubtful accounts based on a specific and collective review of customer accounts as well as experience with collection trends in the gaming industry and current economic and business conditions. The higher provision is attributable to a higher level of outstanding receivables.”
Bloomberry Resorts said – referring to events outside the reporting period – that a “freeze” order imposed on March 15 by the Philippine Court of Appeals on one of the bank accounts of the company’s unit Bloomberry Resorts and Hotels Inc, had been due to be automatically lifted on April 14.
“The “30-day freeze order on one of Bloomberry Resorts and Hotels bank accounts [was] upon the petition filed by Anti-Money Laundering Council in relation to their ongoing investigation,” said parent Bloomberry Resorts, referring to an inquiry by the Philippine authorities into alleged laundering via some casinos of funds stolen from the central bank of Bangladesh.
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Credit rating agency Fitch Ratings