Bloomberry sinks to P1-B loss in Q1 on Solaire expenses

MANILA, Philippines - Razon-led Bloomberry Resorts Corp., the owner of the $1.2-billion Solaire Resort and Casino along Manila Bay, sank into deeper losses in the first quarter amid higher pre-operating expenses.

However, the opening of the hotel and casino complex last March is expected to improve the company’s profitability moving forward.

In a disclosure, Bloomberry said its net loss widened 688 percent to P1.05 billion in the first three months of the year.

“The loss was due to higher pre-operating expenses during the period as well as operating expenses and cost of sales during the first 15 days of commercial operation,” Bloomberry said.

Specifically, total costs and expenses surged more than 12 times to P1.82 billion due to pre-operating activities.

Operating expenses included payroll, advertising and promotions, supplies, gaming taxes and licenses, depreciation and amortization, utilities and other services.

Bloomberry said it also incurred P32.2 million in cost of sales and P42.4 million in interest and financing charges in the first quarter.

However, the casino operator expects a turnaround given the start of Solaire’s operations.

“Solaire, which opened on March 16, generated total revenues of P578.3 million from its first 15 days of operation,” Bloomberry said.

Bulk of the revenues came from gaming sales, which hit P495.6 million. It was followed by food and beverage sales (P57.1 million), retail revenue (P1 million), and other income like lease rentals, communication and transportation services (P1.5 million).

“A number of junket operators have signed up to bring in foreign VIP players,” Bloomberry said, adding that numerous promotional programs and strategic marketing activities will also be launched.

The $750-million Phase 1 of Solaire will put in place 500 rooms, 18,500 square meters of gaming space and 15 luxurious dining options.

Bloomberry is spending $450 million for Solaire’s Phase 1A expansion that will allow the company to open a 300-all-suite hotel, 3,900 parking slots, a shopping center with luxury brand stores and an entertainment theater by next year.

The casino hotel is situated in Entertainment City, a 120-hectare property reclaimed from Manila Bay and owned by the Philippine Amusement and Gaming Corp. (Pagcor).

Pagcor forecasts that gambling revenues in the Philippines will grow from $1.3 billion in 2011 to at least $10 billion by 2017 with the full operations of the four gaming projects in Entertainment City.