GGRAsia – Low VIP hold hurts Bloomberry’s 1Q results, loss widens

Low VIP hold hurts Bloomberry’s 1Q results, loss widens

May 13, 2016 Newsdesk Latest News, Philippines, Top of the deck

Asian casino investor Bloomberry Resorts Corp posted a net loss of PHP1.16 billion (US$24.9 million) in the first quarter of 2016, compared to a net loss of PHP533 million in the prior-year period.

The result included a net loss of PHP209 million from Bloomberry’s operations in South Korea. The firm last year acquired Golden and Luxury Co Ltd, which operates the Jeju Sun Hotel and Casino on South Korea’s southern holiday island Jeju.

Bloomberry also developed and operates Solaire Resort and Casino (pictured) in Manila, the Philippines capital. The firm is on the shortlist for a casino licence in the Republic of Cyprus. It has also proposed building a casino resort in Argentina.

Bloomberry reported total revenues of PHP5.73 billion for the first three months of 2016, compared to PHP6.34 billion in the first quarter of 2015. Gross gaming revenue for the period fell by 5 percent to PHP7.65 billion, the firm said in a said in a filing to the Philippine Stock Exchange on Friday.

Solaire continued to be the main revenue driver for Bloomberry, “accounting for a little over 99 percent of total revenues”, the firm stated.

Solaire’s VIP rolling volume grew 22 percent year-on-year in the first three months of 2016. This was the property’s best quarter regarding VIP quarterly volume since it opened in March 2013, the filing stated.

VIP business was however weighed down by a decline in the VIP hold rate, from 3 percent during the same period last year to 1.94 percent. As a consequence of that, Solaire’s VIP gross gaming revenue (GGR) declined by 21 percent year-on-year.

GGR for mass tables and electronic gaming machines at Solaire increased year-on-year by 12 percent and 7 percent, respectively.

Bloomberry’s total expenses rose by 6 percent year-on-year, from PHP6.21 billion to P6.56 billion. The firm said a restructuration of credit and collection systems plus focus on fixed room junkets “have been paying off, with quarterly provisions for doubtful accounts declining by 80 percent to PHP157 million, from PHP786 million in the same time period last year.”

Earnings before interest, taxation, depreciation and amortisation (EBITDA) declined 31 percent year-on-year to PHP1.21 billion, “owing to the low VIP hold as well as [a] PHP198 million drag from the company’s Korean operations,” Bloomberry stated.

Bloomberry chairman Enrique Razon said in April that the prospects for the company are “far better this year”, with “much lower costs… no more bad accounts, bad debt”.