GGRAsia – Bloomberry 1Q profit up 73pct on record EBITDA

Bloomberry 1Q profit up 73pct on record EBITDA

May 09, 2018 Newsdesk Latest News, Philippines, Top of the deck

Philippines-based casino investor Bloomberry Resorts Corp saw its first-quarter profit rise 72.7 percent year-on-year, to nearly PHP3.70 billion (US$71.2 million), compared to PHP2.14 billion in the prior-year quarter.

Its flagship Manila gaming resort, Solaire Resort and Casino (pictured), posted record quarterly earnings before interest, taxation, depreciation and amortisation (EBITDA) of PHP4.66 billion, a 43.1 percent jump on the nearly PHP3.26 billion in the first three months of 2017, the group told the Philippine Stock Exchange in a Tuesday filing.

Commenting on the quarterly results, Bloomberry’s chairman and chief executive, Enrique Razon, said in a statement included in a separate press release: “We are off to a good start. Our fundamentals are solid, our cost optimisation initiatives are working, so we should be on track to making this a banner year.”

Group wide, consolidated cash operating expenses for the quarter increased by 28.3 percent, from PHP5.44 billion in 2017 to just under PHP6.98 billion in first quarter 2018.

“Higher costs caused Bloomberry to miss our EBITDA estimate by 12 percent,” wrote analysts Praveen Choudhary and Jeremy An of Morgan Stanley Asia Ltd in a note on Tuesday.

They added: “First-quarter 2018 rebate and junket expenses were PHP2.67 billion or 1.36 percent of rolling chip volume (much higher than the 1.2 percent average over the last two years), maybe owing to higher win rate.”

But the Morgan Stanley analysts added that nonetheless Bloomberry had a “leadership position in the fast-growing Philippine gaming market”.

The Philippine casino industry reported gross gaming revenue (GGR) of PHP152.55 billion in full calendar 2017, up 13.8 percent from the prior-year period, said the country’s gaming regulator the Philippine Amusement and Gaming Corp, in a March announcement.

In the first three months this year, Bloomberry reported Solaire’s mass table drop and slot coin-in, grew by 16.6 percent and 22.8 percent, respectively, compared to the same period in the prior year. Solaire’s VIP segment posted a 11.5-percent decline in volume, “but achieved the highest reported” VIP gross gaming revenue (GGR) of PHP7.11 billion, a 39 percent year-on-year growth, the company said.

Total Solaire first-quarter GGR increased by 28.5 percent or nearly PHP3.04 billion, compared to the same period last year, stated the firm.

Jeju Sun Hotel and Casino, Bloomberry’s foreigner-only casino operation on Jeju Island, South Korea, “continued to feel the effects of competition and was also negatively affected by the decline in Chinese tourist arrivals in Jeju,” said Tuesday’s results filing.

“Notwithstanding these challenges, Jeju Sun managed to generate PHP51 million of GGR, down 13 percent from last year,” noted Bloomberry’s management.

The company noted that land it owns at Incheon, near South Korea’s capital Seoul – namely 12.2 hectares (30.1 acres) of Muui Island and the entire 20.96 hectares Silmi Island – is still earmarked for “leisure and tourism… with entertainment facilities and mixed uses developments”.

The quarterly report made no mention of Quezon City as the site for a mooted new project near Manila.