Weak Results at Pacific Online Drag Belle 1Q2019 Net Income

Belle Corp.’s (PSE: BEL) consolidated revenues reached PhP1.9 billion in the first quarter of 2019, down by 6% compared to the PhP2.0 billion achieved in the same period in 2018. Although Belle continued to experience growth at City of Dreams Manila, its overall operating performance was affected by weaker results at Pacific Online Systems Corp. (PSE: LOTO), which leases online betting equipment to the Philippine Charity Sweepstakes Office (PCSO) for their lottery and keno operations.

As a result, Belle’s consolidated net income of PhP700 million for the first quarter of 2019 was 18% lower than the PhP851 million reached for the first quarter of 2018.

Belle’s gaming-focused subsidiary Premium Leisure Corp. (PSE: PLC) registered an increase of 9% in its share in the gaming earnings of City of Dreams Manila, to PhP725 million for the first quarter of 2019 from PhP664 million in the comparable period in 2018. This, however, was offset by the performance of PLC’s 50.1%-owned subsidiary, Pacific Online, which posted a 48% decrease in revenues, from PhP560 million in the first quarter of 2018 to PhP294 million for the first quarter of 2019. This was due largely to competition from the small town lottery. Pacific Online is working closely with the PCSO and its network of agents to boost the attractiveness of the pari-mutuel games it offers, and is working to implement cost efficiency measures across its operations.

Belle’s real estate operations, meanwhile, saw an 8% increase in revenues, from PhP809 million in the first quarter of last year to PhP873 million for the first quarter the current year. Of the current quarter’s real estate revenues, PhP668 million came from Belle’s lease of the land and buildings comprising City of Dreams Manila to Melco Resorts and Entertainment (Philippines) Corp. (PSE: MRP), which was a 17% improvement over the first quarter of 2018. Belle’s real estate sales and property management activities at its Tagaytay Highlands complex contributed the balance of Php205 million.

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