Travellers Group earnings tumble 60% to P2.7B in ‘13

MANILA, Philippines - Foreign exchange losses and higher operating expenses of Resorts World Manila dragged down the net income last year of listed Travellers International Hotel Group Inc.

In a regulatory filing, Travellers Group said its profits sank nearly 60 percent to P2.73 billion from P6.73 billion the previous year.

“The company booked P2.03 billion finance costs including marked-to-market losses on foreign exchange related to its $300-million bond,” Travellers Group said.

But operating revenues rose almost seven percent to P30 billion from P28.05 billion.

“Travellers Group has a track record of attracting customers to its property and is confident in its ability to deliver sustainable growth and sustain market share in a growing industry, capitalizing on the strong and positive economy,” the firm said.

Revenues from hotel, food, beverage and other services jumped 17 percent to P2.5 billion.

“All hotels registered higher occupancy rates as the company made full use of the facilities to drive gaming patronage,” Travellers Group said.

However, operating expenses picked up at a much faster pace of 21 percent to P28.76 billion from P23.61 billion.

Specifically, direct costs associated with gaming, and hotel, food and beverage climbed nearly a fifth to P12.1 billion while general and administrative expenses expanded 19.5 percent to P14.12 billion.

In the fourth quarter alone, the operator of Resorts World Manila reported low VIP turnout.

For the entire year, volume for VIP dropped 27 percent, followed by mass table (-8.5 percent) and electronic table game (-30.9 percent).

The number of gaming tables were unchanged while slot machines rose to 1,822 from 1,684 while electronic table game machines more than doubled to 210 from 100.

In November last year, Travellers Group debuted in the local bourse after raising P17.7 billion.

“The success of Travellers Group’s initial public offering demonstrates the global investment community’s belief in the Philippine tourism and entertainment sector, and in particular, Travellers Group as a vehicle to take on the strong macroeconomic growth potential of the Philippines,” said company president Kingson U. Sian.

Travellers Group, a joint venture between the world’s third-largest cruise line operator Genting Hong Kong and local conglomerate Alliance Global Group Inc., of tycoon Andrew Tan, will spend around $600 million as it pursues Phase 2 and 3 of Resorts World Manila.

Specifically, the hotel and casino operator will complete the 5,000-seat convention center with function rooms in 2014, the Marriott Hotel expansion in 2015, and new hotels Hilton and Sheraton in 2016.