City of Dreams Manila operator reports 50% lower Q1 profit

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THE operator of City of Dreams Manila reported a 49.8% drop in earnings in the first quarter of 2019, weighed down by higher operating costs and forex losses during the period.

In a regulatory filing, Melco Resorts and Entertainment (Philippines) Corp. (MRP) said net income stood at P286.77 million from January to March, lower than the P531.97 million it posted in the same period a year ago.

“(The decline is) primarily related to the increase in operating costs and expenses and net foreign exchange losses during the current period, partially offset by the improved operating revenues, lower interest expense, net of capitalized interest as well as other finance fees,” the company said.

Revenues were up by two percent to P7.51 billion, versus P7.35 billion in the same period in 2018.

Casino revenues alone inched up three percent to P6 billion, as MRP saw a better gaming mix resulting in lower commissions paid to gaming promoters. However, gross gaming revenues dropped due to a general decrease in business volumes.

Rolling chip volume dropped 17% to P119.7 billion. Win rate improved to 3.2%, against the same period a year ago’s record of 2.9%.

Mass market table games drop stood at P9.7 billion, one percent lower year on year. Hold percentage also went down to 30.6%, compared to last year’s 33.8%.

The gaming machine handle segment was the lone casino unit that performed better at P47.5 billion, 12% higher compared to P42.6 billion in the same period in 2018. Win rate was marginally higher at 5.8%, versus last year’s 5.6%.

Under the non-gaming segment, room revenues rose by six percent to P715.9 million from the operations of Nuwa Manila, Nobu Manila, and Hyatt Regency. The company attributed the increase to the higher average daily occupancy rate of 98.5% during the quarter.

Food and beverage revenues stood at P653.5 million, while entertainment, retail, and other revenues reached P138 million.

MRP said it spent a total of P250.8 million for investment activities during the January to March period. Of this, P208.2 million went to capital expenditures, P141.8 million was used for deposits for acquisitions of property and equipment, while the balance went to the acquisition of other assets.

The listed casino operator plans to reduce the number of shares in its authorized capital stock to 11,800 shares from 5.9 million previously. At the same time, it wants to increase the par value of each common share to P500,000 each, from P1 before.

Should any fractional shares be created from the reverse stock split, MCO (Philippines) Investments Ltd. — MRP’s largest shareholder — has proposed to acquire them all at a price of P7.25 per share. — Arra B. Francia