First-quarter profit at Travellers International Hotel Group Inc, the operator of the Resorts World Manila casino resort (pictured), fell by 45.2 percent year-on-year, despite a good performance in net revenues in the reporting period.
Net profit was PHP243.38 million (US$4.66 million), from PHP444.05 million a year earlier. Net revenues for the period grew by 46.5 percent year-on-year to nearly PHP6.90 billion, from PHP4.71 billion in the prior-year period.
A total of 81.2 percent of net revenues came from gaming operations. The numbers were given by Genting Hong Kong Ltd in a Friday filing to the Hong Kong bourse. Genting Hong Kong is a 44.9 percent shareholder in Travellers International, alongside Manila-listed Philippine conglomerate Alliance Global Group Inc.
Travellers International’s revenues from gaming in the three months to March 31 were PHP6.89 billion, up 53.8 percent versus PHP4.48 billion a year earlier.
Earnings before interest, taxation, depreciation and amortisation were up 68.9 percent year-on-year, to nearly PHP1.41 billion, versus PHP832.8 million in the prior-year quarter.
But costs at Travellers International rose sharply in several areas during the three months to March 31.
Promotional allowances – a cost of doing gaming business – rose 111.9 percent, to PHP1.59 billion, from PHP750.7 million.
Direct costs increased by 39.5 percent to nearly PHP3.58 billion, from PHP2.56 billion for the same period of 2018.
Travellers International said the rise in direct costs was “primarily due” to: an “increase in gaming licence fees as a result of higher gaming revenues; increase in casino operating expenses due to the opening of the ground floor gaming area of the Grand Wing; and increase in hotel operating expenses in connection with the opening of three new hotels.”
The filing from Genting Hong Kong on behalf of Travellers International said that as of March 31, gaming capacity increased to 300 tables, 1,830 slot machines and 100 electronic table games (ETG) machines, compared to 233 tables and 1,321 slot machines as of March 31, 2018.
“The increase was primarily due to the opening of the ground floor gaming area of the Grand Wing, and the placement of new ETG machines at the ground floor gaming area of the Garden Wing,” said Travellers International.
Average daily visitor numbers to the property increased by 41.4 percent to a “record high” of 35,110 for the quarter, from an average 24,836 per day for the same period of 2018.
General and administrative expenses increased by 48.0 percent to nearly PHP2.66 billion for the three months ended March 31, 2019 from PHP1.79 billion for the same period of 2018.
The company said the main reasons were an “increase in marketing expenses related to various promotional and advertising activities; increase in salaries and wages; and increase in utilities expenses in relation to phase three development.”
Phase three includes more hotel rooms and gaming facilities at Resorts World Manila, a property close to Manila International Airport.
Tax expense for the first quarter rose 69.3 percent, to PHP9.95 million, from PHP5.88 million.
In late March Travellers International reported to the Manila bourse that 2018 profits had risen sharply. The year before, operations and profits had been affected by a lone-gunman attack and fire that killed many people.
On May 6, the board of Travellers International declared a cash dividend of PHP0.01 per share, amounting in aggregate to a payout of just above PHP187.3 million.
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