Banking group Morgan Stanley says Philippines-based Bloomberry Resorts Corp has a “leading position” in that country’s market, with a growth rate of more than 40 percent in 2019 earnings before interest, taxation, depreciation, and amortisation (EBITDA). That “is higher than for Macau/Singapore and other Philippines gaming companies,” stated a Wednesday memo from analysts Praveen Choudhary and Gareth Leung.
Bloomberry reported net profit of approximately PHP3.91 billion (US$77.2 million) for the three months ended September 30, up 245 percent in year-on-year terms. Group-wide EBITDA for the period doubled from the third quarter 2018, to PHP6.36 billion.
“Bloomberry remained the market leader in the [first] nine months of 2019 among Philippine integrated resorts, with 37 percent GGR [gross gaming revenue] market share,” said the Morgan Stanley analysts. “We estimate a 16 percent GGR growth in 2019 for Bloomberry, driving EBITDA growth to 41 percent, and so it should remain the market leader in 2019.”
Bloomberry is the owner and operator of the Solaire Resort and Casino (pictured) in Manila. It also operates the Jeju Sun Hotel and Casino on South Korea’s southern holiday island Jeju. The company is currently developing Solaire North in Quezon City, on the outskirts of the Philippine capital Manila.
In its Wednesday note, Morgan Stanley said Bloomberry was one of the “key beneficiaries” of the strengthening cluster of casino resorts in Entertainment City, an area is being marketed by the Philippine authorities as a casino cluster meant to emulate the success of Macau’s Cotai district.
“Compared to peers, the company [Bloomberry] has stronger cash flows and a larger land bank for expansion,” said Mr Choudhary and Mr Leung. “Future growth should come from Solaire North in Quezon City (2023) and Solaire Phase 2 (after 2025).”
The Morgan Stanley team said it maintained a “positive view” on the Philippine gaming market. “[We] believe it should continue to grow faster than the economy, driven by low penetration, a strong local economy, supply additions, Chinese visitor arrivals, better VIP margins, favourable policies, and infrastructure improvement,” the analysts stated.
The institution however noted that revenue in the VIP gaming segment could “slow down near term”.
“We forecast VIP growth to slow down to +11 percent/+3 percent year-on-year in 2019/20 (from 23 percent year-on-year in 2018) due to a proxy betting ban and also a crackdown on some of the junkets,” wrote Mr Choudhary and Mr Leung.
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