Bloomberry Resorts Corp. (Bloomberry), owner and operator, through subsidiaries, of the Solaire Resort and Casino, reported a 19-percent drop in its earnings to P1.748 billion before interest, depreciation and amortization (EBITDA) during the first quarter.
Bloomberry’s revenues, net of promotional allowances, increased by 9 percent to P6.343 billion, from P5.829 billion in the same time period last year.
On the other hand, with management’s continuing cost-containment efforts, operating expenses rose by just 25 percent from P3.675 billion in Q12014 to P4.595 billion this quarter with the opening of Sky Tower.
Its opening in November 2014 had more than doubled the size of Solaire, added new restaurants and other non-gaming amenities, as well as increased the property’s hotel room count by 64 percent to a total of 800 rooms.
Despite the decline in its EBITDA, the company was still able to generate P2.692 billion in cash flows from operations, essentially unchanged from the P2.697 billion generated in the first quarter.
“We are happy with the steady growth of Solaire with operations remaining robust. The Sky Tower is a big success, and we expect that investment to generate profits very soon,” Bloomberry chairman and chief executive officer Enrique K. Razon Jr. said.
Gross gaming revenues and non-gaming revenues for the quarter were at P8.09 billion and P323 million, respectively.
The first quarter of this year was the second best quarter in terms of gross gaming revenues after the fourth quarter of last year.
Similar to 2014, Bloomberry maintained a well-balanced gross gaming revenue mix of 50/50 share for VIP and others. Gross gaming revenues grew 15 percent from the P7.06 billion generated in the same time period last year while non-gaming revenues grew 13 percent year-on-year.
Deducting P2.12 billion in promotional allowances, discounts, rebates paid through gaming promoters, progressive jackpot liabilities, and points earned in customer loyalty programs from the P8.09 billion in gross gaming revenues, net gaming revenues stood at P5.971 billion. Net gaming revenues grew 8 percent from P5.508 billion in 1Q2014.
Revenues continued to come mostly from gaming. From the Company’s total revenues of P6.343 billion, gaming contributed 94 percent while hotel, food and beverage accounted for 5 percent. The balance of 1 percent came from retail and others and interest income.
The company’s total expenses in the first quarter reached P6.207 billion, 42 percent higher than the P4.37 billion registered last year.
The significant increase in total expenses came mostly from higher depreciation and interest expenses resulting from the completion of Sky Tower last November as well as provisioning for doubtful accounts.
Bloomberry started charging additional depreciation expenses as well as no longer being able to capitalize interest expenses with the opening of Sky Tower.
Even with the opening of Sky Tower which essentially doubled the size of Solaire, operating expenses increased by just 25 percent year-on-year. The higher expenses led to a P533 million net loss versus a P1.461 billion net profit in the same period last year.
Bloomberry reported P1.748 billion in EBITDA for the first quarter of this year which was down 19 percent on a year-on-year basis.