Junket commissions weigh on Travellers’ 2015 revenue
Travellers International Hotel Group Inc, owner and operator of the Resorts World Manila casino property, on Thursday reported net revenues of PHP24.6 billion (US$529.1 million) for 2015, down 15.3 percent from the previous year.
The decline in revenues is partly related to a 24.6-percent year-on-year increase in promotional allowances to PHP3.1 billion. Such promotional allowances grew “due to some revenue sharing arrangements with junkets in the second half,” the casino operator said in a filing to the Philippine Stock Exchange.
Travellers International is a venture between Philippine-based Alliance Global Group Inc and Genting Hong Kong Ltd.
The firm said its net profit for 2015 fell by 26.2 percent year-on-year to PHP4.0 billion. Travellers International said the full-year net profit would have been higher by 19 percent had relevant currency exchange rates remained at the same levels of 2014.
“Unrealised foreign exchange losses were at PHP765 million due to the strength of the U.S. dollar,” the company said.
The gaming segment contributed PHP24.2 billion in revenue for the full-year 2015, down 14.7 percent from the prior year. Travellers International said table drop volume in the mass-market segment fell by 2.7 percent year-on-year while the VIP segment contracted by 31.7 percent in 2015.
Hotel, food and beverage, and other revenues increased 9.9 percent year-on-year to PHP3.5 billion.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) for 2015 fell 22.2 percent to approximately PHP6.2 billion, compared to approximately PHP7.9 billion reported in 2014.
Direct costs for Travellers International – those associated with gaming, hotel, food and beverage operations but excluding amortisation and depreciation – fell by 2.5 percent to approximately PHP10.5 billion from nearly PHP10.8 billion in 2014.
Travellers International said it remains resilient and profitable, as the Philippines’ “integrated resort industry continues to grow and evolve”.
“The Philippines is already an established tourism and entertainment destination, and we continue to see a lot of potential for further growth,” said Travellers International’s president and chief executive, Kingson Sian.
The firm confirmed on Thursday that phase two of the expansion plan for Resorts World Manila “is almost complete”. The phase two programme includes the Marriott Grand Ballroom – already operational – and the Marriott West Wing, which will add 228 hotel rooms and is “on track for operations in 2016”.
Phase three involves the expansion of Maxims Hotel, and two new hotels to be managed by Hilton Hotels and Resorts and the Sheraton brand of Starwood Hotels and Resorts. It also includes additional gaming areas and retail space. Phase three is scheduled to be completed by the end of 2017.
“We remain committed to deliver quality earnings to our shareholders as we continue to accomplish operational efficiency while further beefing up our non-gaming capabilities,” said Mr Sian.
Travellers International is currently developing its second scheme in the Philippines – the US$1.1-billion Resorts World Bayshore. As at December 31, the company has spent PHP49.3 billion in the development of the new casino project, it said in Thursday’s filing.
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