Gaming firm LRWC swings to loss in 2nd quarter

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LEISURE & Resorts World Corp. (LRWC) swung to a net loss in the second quarter of 2019, as it booked higher operating expenses and lower revenues from its junket operations.

In a regulatory filing, the listed gaming firm reported a net loss attributable to the parent of P130.38 million, against an attributable profit of P99.67 million in the same period a year ago.

“The decline was mainly due to higher operating expenses and significant decline in PIKI (Prime Investment Korea, Inc.)’s gross revenue,” the company said.

PIKI, which generates income from junket operations, saw a 37.1% drop in gross gaming revenues for the April to June period to P581.68 million, as turnover fell 39% to P15 billion. Average win rate was also better at 3.9%, compared to 3.8% in the same period last year.

LRWC’s wholly owned units Blue Chip Gaming and Leisure Corp. and Gold Coast Leisure World Corp., which account for its casino gaming segment, increased revenues by 20.4% to P457.09 million. This followed a 38% rise in turnover to P8.4 billion.

“The increase was brought about by aggressive marketing efforts and programs implemented by the business unit,” the company said.

Revenues from its online unit jumped 65.7% to P296.44 million, thanks to better operations from the company’s locators.

The retail segment through AB Leisure Exponent, Inc. delivered a 10.7% increase in revenues to P2.34 billion, following the growth of its e-bingo line.

Meanwhile, LRWC noted that operating expenses grew by 24.2% during the quarter due to higher interest rates on existing loans, acquisition of more retail sites, higher marketing spending, and private placement costs such as taxes, filing, and professional fees.

For the first half, the company booked an attributable loss of P45.4 million, compared to a net income attributable to the parent of P182.09 million.

The company earlier said that it plans to add 10 to 15 new gaming sites for bingo, e-casino, and slot arcade within the year, banking on the growing demand for slot machines in the market.

“By the second half of 2019, the retail group intends to shift more attention to establishing relatively large outlets that would offer multiple gaming products (i.e. electronic bingo, traditional bingo games offered digitally, electronic casino, sports betting) all under one roof,” LRWC said in a stock filing.

This will be added to the company’s 192 gaming sites as of end-2018.

LRWC in April raised P4.4 billion through private placement, which will be used for the acquisition of new sites.

Shares in LRWC were unchanged at P3.21 each at the stock exchange on Tuesday. — Arra B. Francia