Philippine casino operator Travellers International Hotel Group Inc says its net profit for the second quarter fell by 51.8 percent year-on-year, to nearly PHP600.3 million (US$11.5 million), compared to PHP1.24 billion in the second quarter of 2018.
The decline in profit was despite an increase in revenue for the period, the company said in a Tuesday filing to the Philippine Stock Exchange. Gross revenue for the three months to June 30 was PHP8.08 billion, 44.5 percent higher than the PHP5.59 billion recorded a year earlier.
The company runs the Resorts World Manila casino complex (pictured) under a venture between Philippine conglomerate Alliance Global Group Inc and casino cruise ship specialist Genting Hong Kong Ltd.
Gross gaming revenue (GGR) for the period rose by 46.8 percent, to PHP6.64 billion. The company reported promotional allowances of approximately PHP1.36 billion in the April to June period this year, up from PHP907.9 million in the comparable period in 2018.
“The increase [in revenue] was primarily attributable to improvement in volume in both the non-VIP and VIP [gaming] segments as a result of the increase in gaming capacity as well as the 747 additional rooms from Hilton Manila Hotel and Sheraton Manila Hotel,” the company said in a statement accompanying its unaudited results for the second quarter.
In a separate release on Tuesday, the company said the decline in second-quarter net profit was “due to higher finance charges and increase in depreciation expenses”.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) for the second quarter were PHP1.47 billion from PHP730.9 million for the same period of 2018.
The company said its second-quarter costs increased by 35.5 percent year-on-year to PHP3.52 billion.
“The increase was primarily due to the increase in gaming license fees, higher casino operating expenses as a result of the ramp up of the Grand Wing, and higher hotel operating expenses as a result of the opening of the Hilton Manila Hotel and Sheraton Manila Hotel,” said the firm.
Phase three – dubbed Grand Wing – includes more hotel rooms and gaming facilities at Resorts World Manila, a property close to Manila International Airport. According to previous company information, the property’s Grand Wing will have three international-standard luxury hotels.
In addition to Hilton Manila, which opened in October 2018, and the Sheraton Manila Hotel, which had a soft-opening earlier this year, the Grand Wing will also feature Hotel Okura Manila, which is scheduled to open in the first quarter of 2020 and will bring the Grand Wing hotel room count to approximately 940.
In Tuesday’s release, Travellers International said it was looking to complete its Grand Wing facility “in the latter part of this year”. The expansion will also include extra gaming capacity, said the firm.
Travellers International is also developing the Westside City Resorts World in a zone called Entertainment City in Manila.
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”Due to the moratorium [on new casino projects] imposed by President Rodrigo Duterte, there is no further discussions on the Boracay project with Galaxy Entertainment”
Philippine-based Leisure and Resorts World Corp