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Lower VIP and mass table revenue drags net income down 11% YoY to P2.6 billion
Bloomberry Resorts Corporation (“Bloomberry”, “the Company”), whose subsidiaries own and operate Solaire Resort Entertainment City (Solaire) and Jeju Sun Hotel & Casino (Jeju Sun), reported unaudited consolidated financial results for the three months ended March 31, 2024.
Enrique K. Razon Jr., Bloomberry Chairman and CEO, commented, “In the first quarter of 2024, Solaire in Entertainment City reported lower VIP and mass table game revenues that resulted in an 11 percent decline in consolidated net income. If net income were adjusted for P279 million of Solaire Resort North pre-operating expenses, net income would have declined by only three percent.”
“We had a strong showing in the heavily domestic slot machines segment where revenue grew by 24 percent year-over-year. This strong local demand heightens our anticipation for our second property which will open on May 25. By increasing our mass table offerings and effectively doubling our slot machine capacity, Solaire Resort North will put Bloomberry in a prime position to gain market share.”
Gaming Performance
Solaire’s VIP rolling chip volume and mass table drop were P106.9 billion and P11.1 billion, representing year-over-year declines of 36%, and 8%, respectively. The domestic-focused Electronic Gaming Machine (EGM) segment recorded a 17% year-on-year increase in coin-in. On a sequential basis, VIP rolling chip volume and mass table drop declined by 18% and 7%, respectively, while slots coin-in increased by 7% QoQ.
Total GGR at Solaire was P14.8 billion, representing a decrease of 8% from P16.0 billion in the first 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. Compared to the fourth quarter of 2023, GGR at Solaire improved by 7%.
VIP and mass tables GGR in the first quarter were P4.3 billion and P4.6 billion, representing year-over-year declines of 33% and 6%, respectively. EGM GGR was P5.9 billion, increasing by 24% year-over-year. On a sequential basis, VIP GGR declined by 2% while mass tables and slots recorded increases of 12% and 10%, respectively.
| Amounts in millions | 1Q 2024 | 1Q 2023 | Change in Revenue | |||||
| Volume* | Revenue | Hold | Volume* | Revenue | Hold | Amount | % | |
| VIP tables | 106,940 | 4,268 | 3.99% | 168,230 | 6,396 | 3.80% | (2,128) | (33.3) |
| Mass tables | 11,124 | 4,580 | 41.2% | 12,079 | 4,886 | 40.5% | (306) | (6.3) |
| Slots | 97,879 | 5,903 | 6.0% | 83,956 | 4,761 | 5.7% | 1,142 | 24.0 |
| Total GGR | 14,750 | 16,043 | (1,293) | (8.1) | ||||
*VIP volume represents rolling chips; Mass volume represents mass table drop; Slots volume represents coin in.
Solaire Korea’s Jeju Sun recorded gross gaming revenue of P15.6 million in the first quarter, representing an increase of P14.5 million from P1.2 million in the previous quarter.
Consolidated contra revenue accounts in the first quarter decreased by 21% year-over-year to P3.3 billion. This represents 22% of consolidated GGR compared to 23% in the previous quarter and 26% in the same quarter last year.
Consolidated net gaming revenue for the first quarter reached P10.3 billion, representing an increase of 7% from the previous quarter and a decrease of 5% year-over-year.
Non-gaming Revenues
The Company reported consolidated non-gaming revenue of P2.2 billion for the quarter, representing an increase of 4% from the P2.1 billion generated in the same quarter last year. Consolidated non-gaming revenue was lower by 4% compared to the fourth quarter of 2023.
At Solaire, non-gaming revenue for the first quarter was P2.1 billion, representing an increase of 2% from the same quarter last year. Hotel occupancy was 77.4%, compared to 80.3% in the previous quarter and 76.9% in the first quarter of 2023.
At Solaire Korea, non-gaming revenue was P94.5 million, representing an increase of P58.5 million from the same quarter last year.
Net Revenues
Bloomberry’s consolidated net revenue in the first quarter was P12.5 billion, representing a decrease of 3% from P12.9 billion in the same period last year. Consolidated net revenue increased by 5% compared to the fourth quarter of 2023.
Expenses
First quarter consolidated cash operating expenses reached P7.6 billion, higher by 5% compared to P7.2 billion in the same quarter last year. The increase in cash operating expense was due to higher salaries, and general office expenses. Consolidated cash operating expenses were lower by 4% compared to the previous quarter.
Pre-operating expenses associated with Solaire Resort North amounted to P279.5 million and P33.5 million in the first quarter of 2024 and 2023, respectively.
EBITDA, Net Income and Earnings Per Share
The Company’s first quarter consolidated EBITDA was P4.9 billion, representing a decrease of 14% from P5.7 billion in the same quarter last year. Solaire contributed P5.0 billion to consolidated EBITDA, which was off-set by the P56.6 million LBITDA recorded at Solaire Korea. Consolidated EBITDA was 25% higher than the P3.9 billion recorded in the fourth quarter of 2023.
On a hold-normalized basis, Bloomberry’s consolidated EBITDA for the first quarter was P4.1 billion, P813.1 million lower than the reported consolidated EBITDA of P4.9 billion. Hold-normalized EBITDA in the first quarter would have decreased by 12% year-over-year.
The Company reported consolidated net income of P2.6 billion for the first quarter, representing an 11% decrease from the P3.0 billion net income recorded in the same quarter last year. On a sequential basis, net income improved by 110%.
Excluding the impact of pre-operating expenses associated with Solaire Resort North, EBITDA and net income would have been P5.2 billion and P2.9 billion, declining by only 10% and 3% year-over-year, respectively.
Bloomberry reported Basic Earnings per Share (EPS) gain of P0.231, which compares to P0.276 in the first quarter of 2023.
Balance Sheet and Other Items
As of March 31, 2024, Bloomberry had a consolidated cash and cash equivalents balance of P45.9 billion. Total outstanding long-term debt was P101.1 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 P51.0 billion.
As of March 31, 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.
As of March 31, 2024, Bloomberry had P2.1 billion in net receivables, unchanged from the beginning of the year. The Company made no provisions for bad debt in the first quarter.
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. The balance sheet impact of this transaction will be reflected in the second quarter and full year results disclosure.