Paranaque—(PHStocks)—Bloomberry Resorts Corp. (PSE: BLOOM), owner and operator (through its subsidiaries) of the Solaire Resort & Casino and Jeju Sun Hotel & Casino, recently reported unaudited consolidated financial results for the quarter ended 31 March 2016, with an all-time quarterly high for VIP volume and EGM coin-in despite a slight drop in revenues.
The company’s total revenues for the quarter fell by 10% year-on-year, from PhP6.343 billion to PhP5.734 billion while gross gaming revenues fell by 5 percent to PhP7.651 billion. Bloomberry’s Philippine operations in Solaire Resort and Casino continued to be the main revenue driver, accounting for a little over 99 percent of total revenues.
Solaire continued to do well with positive year-on-year growth for VIP volume, mass table drop and slot coin-in as well as for its non-gaming segment.
Despite continuing challenges in the region, Solaire’s VIP volume grew 22 percent year-on-year with 1Q 2016 generating the highest VIP quarterly volume since it opened in March 2013.
VIP business was, however, weighed down by a decline in the VIP hold rate, from 3% during the same time last year to 1.94%. As a consequence, Solaire’s VIP gross gaming revenues (GGR) declined by 21% year-on-year.
Despite increased competition, Solaire’s mass gaming segment continued to be robust with mass table drop and EGM coin-in for the quarter growing 0.4% and 9%, respectively, year-on-year. The 1Q 2016 EGM coin-in is the highest ever generated by Solaire since its opening. Mainly as a result of a better hold rate for mass tables, GGR for mass tables and EGM increased year-on-year by 12% and 7%, respectively.
Non-gaming revenues rose 50% year-on-year to PhP557 million due to a significant 26% increase in Solaire’s hotel RevPAR coupled with hotel occupancy rising to 85% from 76 percent in 1Q 2015. Korean operations contributed PhP61 million to non-gaming revenues for the quarter, accounting for 11 percent of the total.
Bloomberry’s total expenses rose modestly by 6%, from PhP6.207 billion to PhP6.562 billion. Excluding expenses from its Korea operations, Bloomberry’s total expenses would have risen by only 2% on a year-on-year basis.
Cash operating expenses increased 15% from PhP3.809 billion to PhP4.367 billion with the Korean operations accounting for 5% of the total. The significant decrease in provisions for bad debt kept total expenses for the quarter essentially flat year-on-year at PhP5.832 billion.
The restructuring of the company’s credit and collection systems and infrastructure plus focus on fixed room junkets have been paying off, with quarterly provisions for doubtful accounts declining by 80% to PhP157 million, from PhP786 million in the same time period last year. Gross accounts receivables declined 5% quarter-on-quarter to PhP5.420 billion, from PhP5.719 billion at the start of the year. Combined with a slight 2% increase in allowances for doubtful accounts, the company’s net receivables actually declined by 13% since the beginning of the year to PhP2.454 billion. Accounts receivables over 90 days have remained stable quarter-on-quarter at PhP3.057 billion and remain fully provided for.
EBITDA declined 31% year-on-year from PhP1.748 billion to PhP1.21 billion owing to the low VIP hold as well as the PhP198 million drag from the company’s Korean operations. For the Philippine operations alone, the year-on-year decline would have been less at 20%. The significant decline in provisions for bad debt was not able to offset the lower margin effect of a change in the VIP/mass GGR split and the drag from Korea with EBITDA margins (based on net gaming revenues) declining to 23.4% from 29.3% in 1Q2015.
Inclusive of the PhP209 million net loss from its Korean operations, Bloomberry reported a PhP1.156 billion net loss for the quarter, PhP623 million more than the PhP533 million loss reported in the same period last year. The loss was mainly driven by the lower EBITDA as well as higher foreign exchange losses and interest expenses from the Philippine operations.
The company reported earnings per share (EPS) of P(0.105), wider than the P(0.048) reported in 1Q2015.
Bloomberry Resorts Corp. is the owner and operator (through its subsidiaries) of the Solaire Resort & Casino and Jeju Sun Hotel & Casino. Solaire was the first property to open in PAGCOR’s Entertainment City. Solaire became the first Integrated Resort in Entertainment City with the opening of Sky Tower last November 2014. Aside from a 312-key all-suite five-star hotel, Sky Tower features other amenities such as The Theatre, a 1,760-seat Broadway-style theatre; The Macallan, a luxury cigar and whisky bar; 1,000 sqm of meeting space in The Forum; an international KTV bar, as well as additional gaming facilities. The rollout of shops for the 10,000 sqm gross floor area high-end retail area has already started.