Despite poor Q4 performance, Bloomberry 2017 net profit jumps 161%

Razon-led Bloomberry Resorts Corp. grew its net profit last year by 161 percent to P6.06 billion on record-high gaming volumes from integrated gaming resort Solaire.

In the fourth quarter, however, Bloomberry’s net profit slid by 87 percent to P98 million as the “win” rate from the VIP or high-roller segment dwindled to 1.95 percent, below the normal average of 2.85 percent. There were also one-off noncash expenses relating to the depreciation of a transportation asset, unrealized foreign exchange losses and a P267-million net loss from its Korea operations.

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. While it’s often said that the house always wins, sometimes it wins less than the statistical probability.

In a disclosure to the Philippine Stock Exchange yesterday, Bloomberry said the Philippine operations would have generated P1.65 billion in net profit if the VIP hold rate were at the normal 2.85 percent and would have increased by another P451 million to P2.105 billion without the one-time depreciation write-off (P150 million) and unrealized foreign exchange losses (P301 million).

For the full year, Bloomberry’s net profit of P6.06 billion was buoyed by the 81-percent increase in the profitability of Solaire and the 82-percent reduction in net losses of its Korea operations.

Bloomberry chair and chief executive officer Enrique Razon Jr. said: “Going into our fifth year of operation has become even more exciting with our 2017 results in sync with the growth trajectories we have aimed for. This is largely due to our topnotch management team and the thousands of Bloomberry and Solaire men and women, whose tireless drive and dedication keep us notches ahead.”

In 2017, Solaire generated record VIP volume, mass table drop and electronic gaming machine (EGM) coin-in. VIP volume grew by 11 percent while mass table drop and EGM coin-in rose by 21 percent and 29 percent, respectively.

With full-year VIP hold rates unchanged year-on-year at 2.61 percent amid slightly lower hold rates for its mass tables and slot machines, Solaire’s gross gaming revenue (GGR) grew by 16 percent to P44.52 billion, the highest on record since its opening. Inclusive of the P407 million contribution from Jeju Sun, the company’s gross gaming revenue grew by 17 percent to P44.93 billion this year.

For the fourth quarter, Solaire’s GGR was down by 2 percent year-on-year to P10.27 billion mainly due to the low VIP hold rate.

For the full year, Bloomberry’s nongaming revenue also grew by 40 percent to a new record of P3.33 billion, attributed to improvements in Solaire’s hotel, food and beverage and retail and other segments.

Total 2017 expenses also grew slower than revenue at 15 percent year-on-year to P30.42 billion, helped by a 58-percent reduction in expenses from Korea.—DORIS DUMLAO-ABADILLA