GGRAsia – Leisure and Resorts World Corp 1Q profit down 70 pct

Leisure and Resorts World Corp 1Q profit down 70 pct

May 18, 2018 Newsdesk Latest News, Philippines, Top of the deck

Philippines-based Leisure and Resorts World Corp – which has several interests in the land-based and online gambling sectors – reported group-wide gross gaming revenue of PHP3.86 billion (US$73.7 million) for the first quarter of 2018, up by 2.0 percent in year-on-year terms.

Consolidated net income stood at PHP82.4 million, a year-on-year decline of 69.7 percent, the firm said in a Friday filing to the Philippine Stock Exchange. Leisure and Resorts World said performance was negatively affected by “divestment from the City of Dreams Manila project interest amounting to PHP173 million”.

Leisure and Resorts World Corp was until end-March 2017 an investor in casino resort City of Dreams Manila via wholly-owned subsidiary AB Leisure Global Inc. As announced in November 2016, the firm sold its economic interest in City of Dreams Manila to Belle Corp.

The firm added in its Friday filing that first-quarter net income had been negatively impacted by “pre-operating expenses of our project in Boracay amounting to PHP15 million”.

Macau-based casino operator Galaxy Entertainment Group Ltd announced in December an up to US$500-million investment for the holiday island of Boracay, in the Philippines, in partnership with Leisure and Resorts World Corp. The project however has been put in doubt as President Rodrigo Duterte has said he was not in favour of developing a casino on Boracay.

Results at Leisure and Resorts World Corp were also impacted by a tougher operating environment for its majority-owned subsidiary First Cagayan Leisure and Resorts Corp.

First Cagayan is the master licensor for online gaming in the Cagayan Freeport and Special Economic Zone, an economic development area in the northeast of the country’s main island. Prior to new rules for the issuing of offshore gaming operations in the Philippines, announced in September 2016, most licences issued in the country for overseas-targeted online gambling businesses had originated from the Cagayan Freeport and Special Economic Zone.

“Going forward, First Cagayan’s revenues will continue to be affected by Pagcor’s adoption of the Rules and Regulations for Philippine Offshore Gaming Operations (POGO) last September 2016,” the parent company noted in its first quarter results announcement. Pagcor – or Philippine Amusement and Gaming Corp – is the country’s gaming regulator.

First Cagayan generated PHP131.4 million in gross revenues for the firsth quarter of 2018, representing a 1.1 percent year-on-year decrease.

Leisure and Resorts World said subsidiary Prime Investment Korean Inc – engaged in junket operations at the Midas Hotel and Casino in the Philippine capital Manila – reported a 44.6 percent decline in net income in the first three months of 2018 to PHP13.8 million.

Hotel Enterprises Philippines Inc, a joint venture with another party, and which owns the Midas Hotel and Casino, however recorded a jump in net results. For the first quarter of 2018, Leisure and Resorts World’s share in the net income of Hotel Enterprises Philippines amounted to PHP42.7 million as compared to last year’s quarter share of PHP15.5 million.

Blue Chip Gaming and Leisure – an operator of slot arcades in the Philippines and also a unit of Leisure and Resorts World Corp – reported gross gaming revenue of PHP388.7 million for the January to March period, up from PHP326.2 million a year before. Net income for the period was PHP49.4 million, up by 31.5 percent in year-on-year terms.

Also on Friday, Leisure and Resorts World Corp disclosed its results for full-year 2017. The firm reported consolidated net income of PHP430.3 million, compared to PHP1.82 billion a year earlier. Gross revenue for 2017 was PHP14.94 billion, down 14.1 percent in year-on-year terms.