Premium Leisure dividends on tap for its shareholders

Leisure estate and gaming firm Belle Corp. expects wholly-owned Premium Leisure Corp. (PLC)—a dormant holding firm turned gaming investment arm—to soon churn out cash dividends, possibly without having to wait for the first full-year operations of City of Dreams Manila.

In an interview on Friday, Belle chief finance officer Manuel Gana said that after the recent widening of its public float, Belle had no immediate plans to sell more of its PLC shares.

He said the next step for PLC was to “count the money,” given that it is entitled to half of the gaming revenues or cash flow based on earnings before interest, taxes, depreciation and amortization of COD Manila run by Melco Crown.

Belle is, in turn, seen benefiting from PLC’s dividends given that it owns 79 percent of the gaming investment firm.

PLC earlier announced a dividend policy of paying at least 80 percent of the previous year’s unrestricted retained earnings.

“PLC is really meant to be a dividend play. It’s a direct participation in the earnings of a gaming company,” Gana said.

Gana said it was possible that PLC would start declaring dividends out of its 2014 earnings, even if COD Manila had its soft opening only in December 2014.

He estimated that PLC had chalked up P1.1 billion in retained earnings.

PLC posted a net profit of P1.4 billion from January to September last year, a reversal from the P6.5-million net loss in the same period in 2013.

PLC realized gains from the consolidation of some property assets into parent Belle, the reversal of provision for impairment in Legend International Resorts Hk Ltd. and the higher market valuation of gaming assets transferred into its books when it was converted by Belle into its gaming arm.

Apart from owning half of the gaming operations of the brand-new $1-billion COD Manila, PLC has a 34.5-percent interest in Pacific Online Systems Corp.

It has no debt and no capital expenditures.

PLC is currently valued by the market at P55 billion or slightly higher than the P50-billion market capitalization of the group’s gaming partner, Melco Crown Philippines.

The gaming firm is even valued higher than its parent firm Belle, which has a market capitalization of P45.9 billion.

As such, Gana said Belle was still “undervalued” by the market.