Bloomberry Resorts Corp, the operator of Solaire Resort and Casino in the Philippines, reported strong profit for the second quarter of 2014.
The casino operator posted net income of PHP846.6 million (US$19.3 million) in the three months to June 30, up from PHP22.7 million a year earlier, it said in a filing to the Philippine Stock Exchange on Friday.
For the first half of 2014, Bloomberry posted net income of PHP2.3 billion, a big turnaround from last year’s net loss of PHP1.0 billion. Solaire launched in the first quarter last year.
Gaming continued to generate the bulk of the company’s revenues at 95.3 percent of the total. Gross gaming revenue for the second quarter of 2014 increased by 66 percent year-on-year to PHP6.5 billion, the company said.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) for the second quarter amounted to PHP2.4 billion, 3.7 times higher than a year earlier, it added.
The profitability in the second quarter was mainly due to the significant increase in volume across all gaming segments, the company said. “Management was able to significantly rationalise Solaire’s costs and expenses that resulted in better margins and massive improvement in the overall efficiency in its gaming and non-gaming operations,” it added.
The casino operator, chaired by Philippine billionaire Enrique Razon, opened the US$1.2-billion Solaire at Manila Bay on March 16, 2013. The complex houses a casino with about 295 gaming tables, 1,400 slot machines and 88 electronic table games. About one-third of the gaming floor area is for VIP play.
Solaire’s international business has been increasing, boosting VIP operations but also expenses because of commissions paid to junkets. As of June 30, the casino operator had signed-up with 56 junket operators to bring in foreign VIP players, it said.
Gaming promoters’ expenses amounted to PHP1.9 billion for the second quarter of 2014, up from PHP486.6 million a year earlier, the company reported.
Solaire was the first of four scheduled billion-dollar casinos to rise in Entertainment City, a special economic zone being developed into a gaming and entertainment area under the supervision of state-run Philippine Amusement and Gaming Corp (Pagcor). It is part of the Philippine government’s bid to become a third major gambling centre in Asia alongside Macau and Singapore.
Bloomberry is now expanding the property and phase 1A of Solaire is scheduled to be completed in the fourth quarter of 2014.
With a contract price of PHP2.3 billion, the expansion is expected to provide additional 65 VIP gaming tables and 220 slot machines. It will also include a 312-room all-suite boutique hotel tower, the company said.
In Friday’s filing, Bloomberry also said “there is uncertainty with respect to the income tax exemption” of the subsidiary that runs the casino, Bloomberry Resorts and Hotels Inc.
The subsidiary has filed a court case with the Philippines’ Supreme Court questioning the validity of an April 2013 memo issued by the Bureau of Internal Revenue that imposed corporate income tax at a rate of 30 percent on the private sector casino operators licensed by Pagcor.
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"I am not going to speculate on what the [casino licence refreshment] tender requirements would be. I have full confidence and faith in the Macau government to treat everyone fairly"
Wilfred Wong Ying Wai
President and chief operating officer of Macau-based casino operator Sands China