Resorts World Manila operator Q2 profits halve
MANILA, Philippines – The owner of the Philippines' first mega-casino on Friday, August 14 said its second-quarter profits halved amid an industry wide slump that could threaten the country's bid to become a top gaming destination.
Travellers International Hotel Group, operator of Resorts World Manila, said net income for the April to June period fell 46.78% from a year earlier to P619.04 million ($13.40 million) as gaming revenues declined.
The results, which missed the P1.39 billion ($30.12 million) analyst forecast compiled by Bloomberg News, come after rivals also reported disappointing results due to a slump in Chinese visitors and rising costs.
Travellers' first-half net profit fell 18% to P2.36 billion ($51.15 million), after surging over the same period last year, the company said in a stock exchange filing.
Travellers said net first-half revenue fell 13.5% to P12.47 billion ($270.18 million), hit by a poor performance in gaming and a fall in its mall, theater, and cinema operations.
Foreign exchange losses also cut net profit by P426 million ($9.23 million) for the January to June period as the US dollar strengthened against the peso, it said.
Travellers shares were up 0.19% before noon in Manila as investors stuck with the casino pioneer but sold shares in its rivals amid a fall in the broader market.
"The outlook on the casino industry is negative. The mass market is not growing as fast as everyone expected," Angping and Associates Securities research chief Jose Rafael Supangco told Agence France-Presse (AFP).
Bloomberry Resorts, owner of the Solaire casino, said Thursday it swung into the red in the second quarter due to higher costs from new investments. (READ: Solaire resort casino operator posts loss after betting on boom)
Last week, Melco Crown (Philippines), which runs City of Dreams Manila, said net losses for the same period widened to 1.82 billion pesos. (READ: City of Dreams Manila operator to suspend 100 workers)
A corruption crackdown by Beijing and a festering territorial dispute between Manila and Beijing appear to be discouraging big-spending Chinese tourists from visiting the Philippines, Supangco said.
Poor roads in the capital Manila are also hampering the government's hopes of seeing $7 billion in annual casino revenues by 2020, on a par with Singapore and Las Vegas.
The gaming regulator remained optimistic, however, telling AFP in a statement: "The opportunity for the Philippines to be a major regional entertainment destination remains very strong." – Rappler.com
$1 = P46.16