GGRAsia – Travellers Int third quarter net profit falls 59 pct

Travellers Int third quarter net profit falls 59 pct

Nov 13, 2015 Newsdesk Latest News, Philippines, Top of the deck

Travellers International Hotel Group Inc, operator of the Resorts World Manila casino resort in the Philippines capital, saw its net profit fall 58.7 percent year-on-year in the third quarter.

Such profit was approximately PHP467.10 million (US$9.93 million) in the three months to September 30, compared to just over PHP1.13 billion in the year-prior period.

Earnings before interest, taxation, depreciation and amortisation for the third quarter of 2015 fell 33.9 percent year-on-year, to approximately PHP1.38 billion, compared to the approximately PHP2.08 billion reported in the same period in 2014.

Travellers International’s gross gaming revenue for the third quarter fell 24.6 percent to approximately PHP5.44 billion, from just over PHP7.21 billion in the prior-year period.

“The company remains prudent in the VIP segment, while the mass segment and slots volume has been increasing since the first quarter of 2015,” said the firm in its quarterly results filing to the Philippine Stock Exchange.

Travellers International did not give details on the size of its mass-market gambling business versus its VIP one. It said table count at Resorts World Manila had increased to 305 as of September 30, from 292 in the same period in 2014. The average number of slot machines increased to 1,818 from 1,802, while the electronic table game count remained the same at 210, the company stated.

Promotional allowances as a percentage of gaming revenue increased from 9.9 percent in 2014 to 14.9 percent in third quarter of 2015, said the operator.

Travellers International added that trade receivables and other receivables in the nine months to September 30 had increased by 39.0 percent to approximately PHP5.95 billion, compared to nearly PHP4.28 billion at the end of 2014.

It said this was due “to down payments made to suppliers in relation to the company’s current expansion activities”.

Expansion of Resorts World Manila via construction of phase two and phase three was “on track”, stated Friday’s filing, adding the company had spent approximately PHP11.30 billion for phase two and PHP5.31 billion for phase three as of September 30.

Phase two involves the expansion of the existing Marriott Hotel Manila, bringing additional hotel rooms to the Marriott west wing. It also includes the Marriott Grand Ballroom, a meetings and conventions facility, that formally opened in July 2015.

Phase three consists of two new hotels – the Hilton Manila and the Sheraton Hotel Manila, as well as an extension of Maxims Hotel. Phase three will also include a new gaming area, additional retail space and six basement parking decks, said the filing.

Travellers International’s basic and diluted earnings per share for the nine months ended September 30 were PHP0.18, compared to PHP0.25 in the year-prior period.

The business is a venture between Philippines-based Alliance Global Group Inc and Genting Hong Kong Ltd, a subsidiary of Malaysia’s Genting Bhd.

A report from Morgan Stanley Research last month on the outlook for the Philippines casino market in 2016 said the institution expected to see “an increase in doubtful debts relating to direct VIP/advances to junkets given the casinos’ reliance on Macau junkets”.