Higher finance costs weigh on RWM operator’s bottom line

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THE owner and operator of Resorts World Manila (RWM) recorded a 45% drop in attributable profit in the January to March period due to higher finance costs.

In a regulatory filing, Travellers International Hotel Group, Inc. (TIHGI) said net income attributable to the parent fell to P244.44 million, against the P445.13 million it posted in the same period a year ago.

Finance costs ballooned to P463.85 million during the period, against P23.35 million in the first quarter of 2018.

The lower profit came amid a 46% uptick in revenues to P6.9 billion, which the company attributed to better performance from both its gaming and non-gaming segments.

Gross gaming revenues jumped 53.8% to P6.89 billion, boosted by more casino drops from VIP and non-VIP customers.

TIHGI also benefited from the increase in gaming capacity to 300 tables, 1,830 slot machines and 100 ETG machines by end-March, compared to 233 tables and 1,321 slot machines in the same period last year. This was due to the opening of the Grand Wing’s ground floor gaming area last year.

“We’ve been receiving very positive comments after the soft opening of the Grand Wing last year. We are confident that we can deliver sustainable top line and EBITDA growth moving forward,” TIHGI President and Chief Executive Officer Kingson U. Sian said in a statement.

The Grand Wing will feature three levels of gaming, entertainment, and rental spaces. It will also house one more new hotel, Hotel Okura Manila, that will be opened in the second half of the year.

“With the opening of Hotel Okura Manila in the second half of this year, total room count at the Resorts World Manila complex will be approximately 3,500, supporting the continued growth of the Philippine tourism industry,” Mr. Sian said.

Meanwhile, non-gaming revenues stood at P1.23 billion, 66.2% higher year on year. The company opened three new hotels since the second quarter of 2018, namely Hilton Manila, Marriott Iloilo, and Sheraton Manila. This increased its room count by 1,073 to a total of 2,527 by end-March.

Average occupancy rates also improved to 78% for the period.

Shares in TIHGI were unchanged at P5.63 each on Tuesday. — Arra B. Francia