Home Editors' Picks Pacific Online, Berjaya share prices succumb to lotto uncertainty
Pacific Online, Berjaya share prices succumb to lotto uncertainty
By Arra B. Francia
SHARES of listed companies with equipment lease deals with the Philippine Charity Sweepstakes Office (PCSO) plunged on Monday, following President Rodrigo R. Duterte’s order on Friday last week to suspend all PCSO-sanctioned gaming operations due to “massive corruption” involved.
Pacific Online Systems Corp. (whose stock trades under the ticker symbol LOTO), which supplies online lottery systems for the PCSO in the Visayas and Mindanao, saw its shares plunge 13.61% or 40 centavos to P2.54 apiece on Monday, making it lead the Philippine Stock Exchange’s list of 20 “top losers” for that day.
Pacific Online is also the equipment lessor for all of PCSO’s Keno games across the country.
The president’s order to suspend PCSO-sanctioned gaming came a few days before Pacific Online’s contract with the PCSO is set to expire on July 31.
Meanwhile, shares in Berjaya Philippines, Inc. fell 6.51% or 17 centavos to close at P2.44 apiece. The company, through affiliate Philippine Gaming Management Corp. (PGMC), has an equipment lease agreement with the PCSO that will also expire on Aug. 22.
In an earlier disclosure, PGMC said it was the lone company declared as eligible bidder for the five-year lease of the PCSO Lottery System. The contract covers areas in Luzon, Visayas, and Mindanao. Asked whether the company bagged the deal, a company representative said details on the matter were not immediately available, while the PCSO did not respond to requests for comment as of early evening.
In a disclosure on Monday, Pacific Online said it was coordinating with the PCSO and supported its move to ask the president to reconsider his decision.
“The negative impact… on the operations the corporation and its subsidiaries are inestimable at this point, and the corporation can only hope that the suspension will be lifted sooner rather than later,” the company said.
“Further, the corporation is fully confident that, as a listed company, its transactions with PCSO on both lotto and Keno were entered into in accordance with law, and are above-board and fair.”
For its part, Berjaya said it hopes the suspension will not last for “an extended period of time for the sake of its more than 74 employees.” The company added that it also has other investments that could protect the interests of independent and minority shareholders, such as its luxury car and hotel businesses.
Sought for comment, COL Financial Group, Inc. Chief Equity Strategist April Lynn C. Lee-Tan said: “I guess at this stage, it’s super uncertain that’s why people are staying on the sidelines.”
“On the positive side, the casino stocks will hopefully not be affected. So the effect will not be on the entire gaming sector,” she said in an interview on Monday.
Pacific Online swung to an attributable loss of P56.14 million last semester, against a net income attributable to the parent of P53.1 million in last year’s first half, amid a 51% year-on-year decline in gross revenues to P264.96 million.
For Berjaya, net income attributable to the parent dropped 29% year-on-year to P138.80 million in the quarter ending January, following a five percent dip in gross revenues to P6.98 billion for the same periods.