Bloomberry reports P3.91 billion Net Profit in 3Q2019, up 245% YoY

3Q2019 HIGHLIGHTS:

• Total Gross Gaming Revenue (GGR) at Solaire was P17.111 billion, 46% higher than the P11.711 billion recorded in the third quarter of 2018. Growth was driven by higher hold in VIP and strength in the mass gaming segments
• Mass table drop and EGM coin-in at Solaire were at record quarterly levels of P13.484 billion and P66.910 billion, representing YoY growth of 10% and 23%, respectively
• Solaire’s VIP, mass tables and EGM GGR were P8.645 billion, P4.208 billion and P4.258 billion, representing YoY growth of 117%, 2% and 19%, respectively
• Consolidated Net Revenue was P13.311 billion, representing growth of P4.391 billion or 49% YoY Consolidated EBITDA hit a quarterly high of P6.361 billion, representing a YoY increase of 100%, driven by higher gaming revenues and continued cost control in both the Philippines and South Korea
• Consolidated Net Profit was P3.913 billion, higher by 245% compared to P1.134 billion in the same quarter last year

NINE MONTHS 2019 HIGHLIGHTS:

• Consolidated GGR was P45.846 billion, representing growth of 21% over P38.038 billion in the first nine months of 2018. Total GGR at Solaire was P45.348 billion, up 20% YoY
• Consolidated Net Revenue was P35.697 billion, representing an increase of 24% against P28.845 billion over the same period last year
• Consolidated EBITDA was P15.817 billion compared to P11.468 billion in the first nine months of the prior year, up 38% YoY
• Consolidated Net Profit was P8.566 billion, higher by P2.125 billion or 33% compared to Consolidated Net Profit of P6.441 billion recorded in the first nine months of 2018. Net profit increased YoY despite foreign exchange losses and higher interest expenses as a result of the full drawdown of the P73.5 billion Syndicated Loan in the first half of 2018

Bloomberry Resorts Corporation (Bloomberry, the Company), whose subsidiaries own and operate Solaire Resort & Casino (Solaire) and Jeju Sun Hotel & Casino (Jeju Sun), reported unaudited consolidated financial results for the three months and nine months ended September 30, 2019.

Enrique K. Razon Jr., Bloomberry Chair and CEO, says: “I am pleased to report third quarter net profit of P3.91 billion, representing a 245% year-on-year increase despite incurring higher interest expenses and foreign exchange losses. We are now in the last stretch of 2019 and we look forward to delivering a strong set of full year results.”

Gaming Performance

In the third quarter of 2019, total GGR at Solaire was P17.111 billion, a record quarterly high, representing growth of 17% and 46% on a sequential and YoY basis, respectively. Growth was driven by strength in all gaming segments.

Solaire’s VIP volumes were P198.655 billion, representing a sequential increase of 12% and a YoY decline of 5%. VIP revenues increased by 117% YoY to P8.645 billion as the hold rate increased to 4.35% in the third quarter from 1.91% in the same period last year. VIP revenues were higher by 40% sequentially.

Third quarter mass table drop and EGM coin-in at Solaire hit record levels of P13.484 billion and P66.910 billion, representing YoY growth of 10% and 23%, respectively.

Mass table revenues were P4.208 billion, up 3% sequentially and 2% YoY. EGM revenues were P4.258 billion, representing a decrease of 2% compared to the previous quarter and an increase of 19% compared to the same period last year.

In the first nine months of 2019, VIP, mass tables and EGM revenues were higher by 32%, 6% and 18% compared to the same nine-month period a year ago. Despite the recent strength of the VIP business which was fueled by a higher than normal VIP win rate, the mass gaming segments continue to be the greatest source of near-term and long-term growth for Solaire.

At Solaire Korea, third quarter gross gaming revenues were P109 million, lower by 44% YoY due to an unfavorable hold percentage at Jeju Sun.

Consolidated contra revenue accounts for the third quarter increased by 29% YoY to P4.886 billion. This represents 28% of consolidated GGR compared to 28% in the previous quarter and 32% in the third quarter last year.

Consolidated gaming revenues after contra revenue accounts reached P11.231 billion in the third quarter, representing growth of 55% over the same quarter last year. In the first nine months, consolidated gaming revenues after contra revenue accounts hit P29.690 billion, up 24% YoY.

Non-gaming Revenues

In the third quarter, the Company reported consolidated non-gaming revenues of P2.079 billion, representing growth of 23% over the P1.689 billion generated in the same period last year. In the first nine months of 2019, consolidated non-gaming revenues were P6.007 billion, higher by 23% YoY.

At Solaire, third quarter non-gaming revenues were P2.040 billion, higher by 25% YoY, driven by higher hotel and F&B revenues. Hotel occupancy at Solaire in the third quarter was 91.8%, compared to 91.7% in the same quarter last year.

Solaire Korea’s third quarter non-gaming revenues declined by 37% YoY to P39 million due to ongoing renovations in 80% of the property’s hotel rooms and all four of its F&B outlets. The Company anticipates completion of renovation works by the fourth quarter of 2019.

Net Revenues

Bloomberry’s third quarter consolidated net revenues were P13.311 billion, up by 49% from P8.920 billion in the same quarter last year and higher by 15% compared to the previous quarter. Approximately 99% of net revenues were generated in the Philippines and the remaining 1% was generated by the Group’s Korea operations. Consolidated net revenues in the first nine months of 2019 were P35.697 billion, up by 24% YoY.

Expenses

The Company’s third quarter consolidated cash operating expenses reached P6.897 billion, representing an increase of 4% and 20% on a sequential and YoY basis, respectively. Consolidated cash operating expenses in the first nine months of 2019 were P19.743 billion, higher by 14% YoY.

At Solaire, third quarter cash operating expenses were P6.722 billion, up by 22% on a YoY basis mainly due to higher gaming taxes, consistent with the increase in gaming revenues.

In Solaire Korea, cash operating expenses for the quarter were P174 million, lower by P31 million YoY.

EBITDA, Net Profit and Earnings Per Share

Bloomberry’s third quarter consolidated EBITDA was at its highest ever quarterly level at P6.361 billion, representing an increase of 28% and 100% on a sequential and YoY basis, respectively. Solaire contributed P6.433 billion to consolidated EBITDA, which was off-set by the P73 million negative EBITDA recorded at Solaire Korea. Consolidated EBITDA in the first nine months was P15.817 billion, higher by 38% YoY.

On a hold-normalized basis, Bloomberry’s consolidated EBITDA in the third quarter was P4.497 billion, P1.864 billion lower than the reported consolidated EBITDA of P6.361 billion. Hold-normalized EBITDA in the third quarter would have increased by 6% and 1% on a sequential and YoY basis, respectively.

The Company reported third quarter consolidated net profit of P3.913 billion, 245% higher than the P1.134 billion in the same quarter last year as a result of the strong performance across all gaming segments. Third quarter consolidated net profit was 60% higher sequentially. Consolidated net profit in the first nine months of 2019 was P8.566 billion, up by 33% YoY despite interest expenses and foreign exchange losses being higher by P1.025 billion and 1.132 billion, respectively. Interest expenses were higher YoY as a result of the full drawdown of the P73.5 billion Syndicated Loan in the first half of 2018.

Bloomberry reported third quarter basic earnings per share (EPS) of P0.356, representing an increase of 246% YoY. EPS in the first nine months was P0.780, higher by 33% YoY.

Balance Sheet and Other Items

As of September 30, 2019, Bloomberry had a consolidated cash and cash equivalents balance of P40.713 billion. Total long-term debt was P69.635 billion, which represents the current and non-current portions of the P73.5 billion Syndicated Loan. Total equity attributable to equity holders of the parent company was P43.157 billion.

As of September 30, 2019, Bloomberry had P3.951 billion in net receivables, 41% higher than at the beginning of the year due to additional credit issuances. Receivables over 90 days increased by P715 million from the end of the previous quarter to P1.100 billion. Note that the vast majority of this increase has been collected as of end-October. The Company made P53 million of additional provisions for bad debt in the third quarter, representing only 1.2% of gross receivables.

Bloomberry has a P40 billion Loan Facility to be used to fund the construction, pre-opening, and pre-operating expense requirements of Solaire North in Quezon City. As of September 30, 2019, the company has not drawn on this facility.

Profile: Bloomberry Resorts Corporation

Bloomberry Resorts Corporation’s subsidiaries own and operate the Solaire Resort & Casino (Solaire) and Jeju Sun Hotel & Casino (Jeju Sun). Solaire was the first Integrated Resort property to open in PAGCOR’s Entertainment City. In November 2014, Solaire opened the Sky Tower which added a 312-key all-suite five-star hotel and other amenities to Solaire’s hospitality and entertainment portfolio. The Sky Tower features 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 retail and gaming facilities. Solaire’s high-end retail area, The Shoppes at Solaire, features the following luxury boutiques: Louis Vuitton, Versace, Prada, Bvlgari, Salvatore Ferragamo, Givenchy, Y-3 (Adidas) and Luk Fook Jewelry, among others. Solaire’s Sky Tower was given the Forbes Travel Guide five-star rating for the third consecutive year last February 2019.