RAZON-led gaming firm Bloomberry Resorts Corp. swung to a net loss in the first quarter as higher depreciation and other expenses from the opening of its new wing offset the double-digit rise in gaming revenues.
Bloomberry, operator of Solaire Resort & Casino, incurred a net loss of P533 million versus a P1.46-billion net profit in the same period last year, the company disclosed to the Philippine Stock Exchange on Wednesday.
Gross gaming revenues went up by 15 percent year-on-year to P8.09 billion as Solaire attracted an even split of VIP (very important person)/mass market. Revenues net of promotional allowances increased by 9 percent year-on-year to P6.34 billion.
Bloomberry noted that the first quarter of this year was the second best quarter in terms of gross gaming revenues after the fourth quarter of last year.
Meanwhile, non-gaming revenues also grew by 13 percent year-on-year.
“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 Razon Jr. said.
By revenue mix, 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.
Operating expenses rose by 25 percent with the opening of a new phase called Sky Tower which doubled the size of the Solaire facility. This new wing 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.
Total expenses rose by 42 percent to P6.2 billion which Bloomberry attributed to higher depreciation and interest expenses resulting from the completion of Sky Tower last November as well as provisioning for doubtful accounts. Bloomberry said it had started charging additional depreciation expenses, no longer being able to capitalize interest expenses with the opening of Sky Tower.
Cash flow based on earnings before interest, taxes, taxes, depreciation and amortization (EBITDA) amounted to P1.75 billion, down by 19 percent on a year-on-year basis.
Because expenses grew at a faster rate than revenues, Bloomberry’s EBITDA margins fell from 37 percent in the first quarter of 2014 to 28 percent.