GGRAsia – Nomura raises GGR forecast for Philippine op Bloomberry

Nomura raises GGR forecast for Philippine op Bloomberry

Nov 12, 2020 Newsdesk Latest News, Philippines, Top of the deck

Nomura Group research says it is updating its gross gaming revenues (GGR) estimates for Philippine casino operator Bloomberry Resorts Corp, following the company’s Tuesday announcement of its third-quarter results. Bloomberry runs the Solaire Resort and Casino (pictured), in the Entertainment City zone in the Philippine capital Manila.

Solaire recorded GGR of PHP4.38 billion (US$90.3 million) for the third quarter, up from the PHP464.1 million in the preceding quarter, but down 74.4 percent from the PHP17.11 billion achieved in the equivalent period a year earlier.

“Third-quarter GGR surprised on the upside,” stated analysts Diane Nicole Go and Thomas Huang in a Thursday memo. Bloomberry’s GGR for the first nine months of 2020 stood at PHP17.3 billion “and already surpassed our PHP16.9 billion financial-year 2020 estimate,” they added.

The brokerage said it was aligning its estimates with Bloomberry’s results in the nine months to September 30, incorporating “improved GGR trends (circa 23-percent higher on average).”

Nomura now forecasts that Bloomberry will be able to achieve GGR levels equivalent to “35 percent, 65 percent, and 85 percent” of financial-year 2019 in, respectively, 2020, 2021 and 2022.

The institution also noted that Solaire “saw a pick up quarter-on-quarter in volumes/GGRs across all segments,” even though the casino is currently running at a 30-percent capacity, as ordered by the local authorities as a countermeasure against Covid-19

The brokerage also said it expected Bloomberry to benefit from being allowed to offer online bets. The nation’s gaming regulator, the Philippine Amusement and Gaming Corp (Pagcor), was said to have allowed land-based casinos to accept bets online, according to media reports. The reports did not specify the types of bets allowed under the online system.

Nomura cited Bloomberry’s management as saying the company needed to “get more clarity on the scope and details of online gaming from the regulator.”

“The company believes that the segment may be a potential revenue stream but notes that this still remains in the development stage as laying out the infrastructure may take time, with complete roll-out likely only in the first-quarter or second-quarter 2021,” said the Nomura analysts.

They added: “In our view, this could help mitigate the impact of lost in-house revenues in the near term, until casinos are allowed to regain full capacity.”

In the third quarter, Bloomberry’s consolidated earnings before interest taxation, depreciation and amortisation (EBITDA) were negative PHP203.7 million, compared to a positive result of PHP6.36 billion in the same quarter of 2019. The result was still an improvement from the negative EBITDA of PHP1.96 billion recorded in the second quarter of 2020.