Travellers posts 1.7% drop in net income to P2.4B

Travellers International Hotel Group Inc. (TIHGI), owner and operator of Resorts World Manila (RWM), saw a 1.7-percent drop in first semester net profit to P2.4 billion as gaming revenues dipped alongside some foreign exchange overhang.

Based on a regulatory filing, net profit for the second quarter alone fell by 46.4 percent year-on-year to P622 million as gaming revenues dropped by 10.5 percent to P5.7 billion.

For the first semester, gross gaming revenues of Travellers, which trades on the Philippine Stock Exchange under the ticker RWM, amounted to P12.51 billion, down 7.9 percent year-on-year.

Average daily property visits increased by 5.5 percent to 19,718 in the first half. However, “drops” or the volume of bets declined, which the company attributed to a deliberate strategy to “approach the VIP segment with more prudence,” the company said.

But Travellers said the decline in drops was offset by an increase in the blended “win rate,” which was at at 5.2 percent for the first six month compared to 3.9 percent in the same period last year. A casino’s “win” or “hold” rate is based on the element of luck but is also affected by the spread of table limits, a player’s skill and resources and amount of time spent in the casino. This means that while gamers “dropped” less on the table, the “house” won more as a ratio of those total bets.

In a press statement, Travellers said unrealized foreign exchange fluctuation also reduced the net profit during the first six months by P426 million.

Travellers’ gross revenue for the period amounted to P14.2 billion, with cash flow based on earnings before interest, taxes, depreciation and amortization (Ebitda) at P3.5 billion. Doris Dumlao-Abadilla