Weak VIP and higher costs drags second quarter net income down 61% to P1.3 billion

Solaire Resort North records positive EBITDA in first 37 operating days

2Q2024 HIGHLIGHTS:

• Bloomberry’s Gross Gaming Revenue (GGR) was P14.5 billion, representing a decrease of 4% from P15.1 billion in the second quarter of 2023. The decline was due to continued weakness in the VIP segment. The decline was off-set by the combined mass table and Electronic Gaming Machine (EGM) revenues across Solaire Resort Entertainment City (SEC) and Solaire Resort North (SN) increased by 3% year-over-year.
• SN reported positive EBITDA of P250.1 million in its first 37 operating days
• Consolidated EBITDA was P3.6 billion, lower by 33% compared to P5.5 billion in the second quarter of 2023. The decline was due to lower EBITDA at SEC as well as higher operating expenses, specifically, pre-operating and operating expenses associated with SN. Excluding the impact of SN’s pre-operating expenses, consolidated EBITDA would have declined by 20%.
• Consolidated net income was P1.3 billion, compared with P3.4 billion in the same period last year.

FIRST HALF 2024 HIGHLIGHTS:

• Consolidated GGR was P29.2 billion, representing a decrease of 6% from P31.2 billion in the first half of 2023. SEC recorded GGR of P28.1 billion, compared with P31.2 billion in the same period last year.
• Consolidated net revenue was P24.8 billion, representing a decrease of 3% against P25.6 billion in the same period last year.
• Consolidated EBITDA was P8.6 billion, compared with P11.2 billion in the first six months of the previous year. EBITDA was impacted by continued weakness in the VIP segment as well as pre-operating and operating expenses at SN.
• Consolidated net income was P4.0 billion, compared with P6.4 billion reported in the first half of 2023.

Bloomberry Resorts Corporation (“Bloomberry”, “the Company”), whose subsidiaries own and operate Solaire Resort Entertainment City (SEC), Solaire Resort North (SN), and Jeju Sun Hotel & Casino (Jeju Sun), reported unaudited consolidated financial results for the three months and six ended June 30, 2024.

Enrique K. Razon Jr., Bloomberry Chairman and CEO, commented, “In the second quarter and first half of 2024, our resilient mass gaming segment across two properties increased year-over-year despite the very high base set in the first half of 2023. However, continued weakness in the VIP segment as well as pre-operating and operating expenses at Solaire Resort North resulted in a decline in consolidated EBITDA and net income.”

“Despite our weaker consolidated year-over-year performance, I am pleased to report that Solaire Resort North recorded positive EBITDA of P250 million in its first 37 days of operations. We are in the early stages of the property’s ramp-up and are happy with the pace, especially as we compare it to the ramp-up of Solaire in Entertainment City over 11 years ago. As revenues at our second property grow, we anticipate further synergies and positive operating leverage to contribute to our group’s profitability in the coming quarters.”

Consolidated Results

Bloomberry’s Gross Gaming Revenue (GGR) was P14.5 billion, representing a decrease of 4% from P15.1 billion in the second quarter of 2023. In the first six months of 2024, consolidated GGR was P29.2 billion, lower by 6% compared to the same period last year. While consolidated GGR was impacted by continued weakness in the VIP segment, the combined performance of mass table games and electronic gaming machines across two properties recorded growth of 3% and 6% in the second quarter and first half, respectively.

Contra-revenue accounts in the second quarter decreased by 2% year-over-year to P3.4 billion. This represents 23% of consolidated GGR, unchanged from the same quarter last year.

Non-gaming revenue was P2.4 billion for the quarter, representing an increase of 19% from P2.0 billion generated in the same quarter last year. In the first half of 2024, non-gaming revenue was P4.6 billion, higher by 11% year-over-year. Net revenue in the second quarter was P12.3 billion, representing a decrease of 3% from P12.6 billion in the same period last year. Net revenue declined by 3% in the first six months to P24.8 billion. Cash operating expenses in the second quarter reached P8.6 billion, higher by 20% compared to P7.2 billion in the same quarter last year.

Cash operating expenses increased due to the recognition of pre-operating and operating expenses associated with Solaire Resort North (SN) which commenced operations last May 25, 2024. The Company made no provisions for bad debt in the second quarter.

SN’s pre-operating expenses amounted to P764.1 million and P73.8 million in the second quarter of 2024 and 2023, respectively.

For the quarter, the Company recorded consolidated EBITDA of P3.6 billion, representing a decrease of 33% from P5.5 billion in the same quarter last year. Excluding the impact of SN’s pre-operating expenses, consolidated EBITDA would have declined by 20%.

In the first half of 2024, Bloomberry’s EBITDA was P8.6 billion, lower by 24% year-over-year. Adjusting for pre-operating expenses of P1.1 billion and P114.5 million in the first six months of 2024 and 2023, respectively, consolidated EBITDA would have declined 15% year-over-year.

Net income decreased by 61% to P1.3 billion from P3.4 billion in the second quarter of 2023. Net income in the first six months was P4.0 billion, down 38% compared to P6.4 billion the first half of 2023. Excluding the impact of gains from the disposal of an asset and the liquidation of a subsidiary, net income would have decreased by 58% year-over-year in the second quarter of 2024 and by 35% year-over-year in the first six months of 2024.

In the second quarter of 2024, the Company reported Basic Earnings per Share (EPS) gain of P0.118, which compares to P0.316 in the same quarter last year. EPS gain in the first half of 2024 was P0.349, lower than the P0.592 reported in the first half of 2023.

Solaire Resort Entertainment City (SEC)

For the second quarter, total GGR at SEC was P13.3 billion, representing a decline of 12% from P15.1 billion in the second quarter of 2023. GGR was negatively impacted by lower VIP rolling chip and mass table drop volumes, which was partly offset by strong growth in EGM coin-in and GGR.

VIP rolling chip volume was P117.9 billion, representing a year-over-year decline of 32%. The VIP hold rate was 3.17% against 2.73% in the second quarter of 2023. VIP GGR was P3.7 billion, declining by 21% compared to P4.7 billion in the same quarter last year.

Mass table drop was P10.2 billion, representing a year-over-year decline of 23%. The mass table hold rate was 41.7%, compared to 37.9% in the same period last year. Mass table GGR was P4.3 billion, down by 15% compared to P5.0 billion in the second quarter of 2023.

EGM coin-in was P92.6 billion, recording a 3% year-on-year increase. The EGM hold rate was 5.7% compared to 6.0% in the second quarter of 2023. EGM GGR was P5.3 billion, lower by 2% compared to P5.4 billion in the same quarter last year.

Non-gaming revenue was P2.0 billion, up 6% from P1.9 billion in the same quarter last year. Net revenue was P11.0 billion, down 12% from P12.5 billion in the second quarter of 2024.

SEC generated EBITDA of P4.4 billion which was down 23% from P5.8 billion in the second quarter of 2023.

Solaire Resort North (SN)

SN logged 37 operating days in the second quarter and recorded total GGR of P1.1 billion from its mass table games and EGM businesses. Non-gaming revenue was P213.0 million. Net revenue was P1.1 billion while EBITDA was P250.1 million.

Jeju Sun Resort & Casino (Jeju Sun)strong>

Solaire Korea’s Jeju Sun recorded gross gaming revenue of P35.7 million in the second quarter, representing an increase of P31.0 million from P4.7 million in the same quarter last year.

Non-gaming revenue was P125.5 million, up 45% from P86.7 million in the same quarter last year. Net revenue was P161.0 million, higher by 77% year-over-year.

Jeju Sun generated LBITDA of P89.4 million which compares to LBITDA of P49.7 million recorded in the second quarter of 2023.

Balance Sheet and Other Items

As of June 30, 2024, Bloomberry had a consolidated cash and cash equivalents balance of P25.3 billion. Total outstanding long-term debt was P99.4 billion, which represents the balance of the current and non-current portions of the P73.5 billion, P20.0 billion, and P40.0 billion Syndicated Loan Facilities. Total equity attributable to equity holders of the parent company was P35.1 billion.

Pursuant to the Settlement Agreement disclosed by the Company last March 18, 2024, Bloomberry’s subsidiary Sureste Properties, Inc. on April 30, 2024 purchased 921,184,056 Bloomberry shares from the former casino manager through a Special Block Sale on the Philippine Stock Exchange. The total Settlement Amount was US$300 million which is equivalent to P18.22 per share at a conversion rate of P55.94 to USD1.00. This transaction was reflected in the cash and equity balances as of June 30, 2024.

As of June 30, 2024, the Company has drawn P26.2 billion from the P40 billion Syndicated Loan Facility, higher by P8.0 billion from the end of the prior year.

Bloomberry had P2.2 billion in net receivables as of June 30, 2024, higher by P105.6 million from the beginning of the year. Total allowances cover approximately 96% of all receivables over 90 days.

About Bloomberry Resorts Corporation

Listed on the Philippine Stock Exchange (PSE: BLOOM), Bloomberry Resorts Corporation is a leader in developing world-class destinations, comprising luxurious accommodations, premier gaming facilities, and exceptional dining. Its portfolio includes Solaire Resort Entertainment City, Solaire Resort North in Quezon City, and Jeju Sun Hotel & Casino (Jeju City) in Korea.

Solaire Resort North, a USD $1.0 billion venture, is the latest addition to the celebrated Solaire brand. It is Quezon City's inaugural luxury destination to offer authentic five-star services and amenities.

For more information, please visit http://www.bloomberry.ph and https://www.solaireresort.com

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