Philippine gaming firms in losing streak in H1

MANILA, Philippines - Gaming companies in the Philippines are losing their winning streak due to mounting costs and because of what seems to be a spillover of the gaming slump in Macau, as seen in their first half losses.

But the chief of the country’s gaming regulator, the Philippine Amusement Gaming Corp. (Pagcor) is unfazed with the recent developments, saying gaming revenues are still going up, attributing instead the companies’ losses to expansion expenses.

“This has nothing to do with gaming behaviour. The figures will speak for themselves. The revenues are still up,” said Pagcor chairman Cristino Naguiat Jr.

Melco Crown Philippines, the subsidiary of Melco Crown and Belle Corp., incurred a net loss of P4.9 billion in the first half of the year from P2.4 billion, which it attributed to taxes, fees and expenses related to the continuous improvement of the resort and casino complex.

The resignation of James Packer as chairman of global firm Crown Resorts also puts a cloud of uncertainty over the company’s operations.

However, local officials were quick to assure that Packer’s resignation won’t have a negative impact on operations of Melco Crown’s City of Dreams, the newest casino resort at the 100-hectare Las Vegas-style Entertainment City.

“Prospects are good. James Packer has nothing to do with Manila operations. Lawrence Ho is the CEO,” said Willy Ocier, vice chairman of Belle Corp.

Manuel Gana, chief financial officer of Belle also said Packer was not involved in the day-to-day operations of COD Manila.

City of Dreams has suspended 100 workers temporarily due to mounting costs, which the company said is a temporary streamlining.

“The company has taken a step toward a temporarily streamlining of the cost structure, and has to temporarily suspend employment with certain employees. This proactive stance, though a tough and difficult decision affecting less than two percent of its total manpower, is essential for long-term sustainability of business,” it said in a statement sent to The STAR.

It said it continues to expand across all segments, with gaming and non-gaming revenues delivering robust growth in the second quarter.

Travellers International Hotel Group, operator of Resorts World Manila, meanwhile, reported a decline in revenues in the first half to P2.4 billion, 1.67 percent lower while second quarter income fell 46.4 percent year-on-year to P622 million as gaming revenues dropped by 10.5 percent to P5.7 billion during the period.

Bloomberry Resorts Corp. likewise incurred a net loss of P786.5 million in the April to June period, widening the net loss of P533.1 million in the first quarter, its income report showed.

As a result, its first half net loss ballooned to P1.32 billion compared to a net income of P2.31 billion a year earlier.

The company said operating cost and expenses of Solaire increased by 32.3 percent to P10.98 billion in the six-months ending June on the back of costs and expenses related to the full operation of Sky Tower and related amenities in the first half of 2015.

In a recent research note, First Metro said Macau’s gaming slump has contaminated the local industry’s earnings outlook.

Analysts said there is an ongoing gaming slump in Macau due to a crackdown on corruption and a no-smoking policy in some casinos.