Bloomberry Resorts Corp has unveiled its financial performance for the second quarter of 2024, revealing a 4% decrease in consolidated gross gaming revenues (GGR) to Php14.5 billion (US$255 million) compared to the same period last year. This decline primarily stems from a sharp drop in VIP gaming volumes at its flagship Entertainment City property, despite a promising start for the newly opened Solaire Resort North in Quezon City.
Financial Performance Overview
The company’s consolidated results for Q2 2024 highlight a notable decrease in key financial metrics. Consolidated EBITDA fell by 33% to Php3.6 billion (US$63.2 million), while net income dropped to Php1.3 billion (US$22.8 million) from Php3.4 billion (US$59.7 million) in the previous year. These figures reflect the impact of a significant decline in VIP segment performance and the initial expenses associated with the new Solaire Resort North.
Solaire Resort North: Early Success and Financial Impact
Solaire Resort North, which began operations in late April 2024, made a noteworthy contribution during its first 37 days. The new property generated Php1.1 billion (US$19.3 million) in GGR from mass table games and electronic table games. Additionally, it achieved a positive EBITDA of Php250.1 million (US$4.4 million), despite operating with several gaming and non-gaming facilities still to be launched. The early performance of Solaire Resort North is promising, but it has not yet been sufficient to counterbalance the declines experienced at Entertainment City.
Challenges at Entertainment City
The primary challenge impacting Bloomberry’s consolidated results is the substantial decline in VIP gaming activities at the Entertainment City property. VIP rolling chip volume fell by 32% to Php117.9 billion (US$2.07 billion), while GGR decreased by 21% to Php3.74 billion (US$65.7 million). This decline in VIP performance has been a significant factor in the overall reduction in consolidated revenue and profitability.
Year-to-Date Performance
For the first half of 2024, Bloomberry reported a 6% year-on-year decrease in consolidated GGR, totaling Php29.2 billion (US$513 million). Consolidated EBITDA for this period was Php8.6 billion (US$151 million), down 23% from the previous year, and net income dropped by 38% to Php4.0 billion (US$70.2 million). These results reflect the ongoing challenges in the VIP segment and the financial impact of pre-operating and operational costs associated with Solaire Resort North.
Management’s Perspective
Enrique K. Razon Jr., Chairman and CEO of Bloomberry Resorts Corp, acknowledged the challenges faced during the second quarter and the first half of 2024. He attributed the decline in consolidated performance to the continued weakness in the VIP segment and the associated expenses of the new Solaire Resort North.
Despite these challenges, Razon expressed optimism about the future. He highlighted the positive EBITDA achieved by Solaire Resort North in its early days of operation and compared it favorably to the ramp-up of the original Solaire property. Razon expects that as revenues from Solaire Resort North continue to grow, the company will experience further synergies and positive operating leverage that will enhance overall profitability in the coming quarters.
Outlook and Future Expectations
Bloomberry Resorts Corp remains focused on leveraging the growth of Solaire Resort North to drive future profitability. The company anticipates that as the new property continues to ramp up and generate additional revenue streams, it will contribute positively to the group’s overall financial performance. The strategic emphasis will be on navigating the current challenges in the VIP gaming segment while capitalizing on the potential of Solaire Resort North to achieve a stronger financial position in the quarters to come.
Bloomberry Resorts Corp’s Q2 2024 results reveal a mixed performance landscape. The promising start of Solaire Resort North contrasts with the significant decline in VIP gaming volumes at the Entertainment City property, leading to a decrease in consolidated EBITDA and net income. As the company continues to integrate and ramp up its new property, it remains hopeful that future revenue growth and operational efficiencies will bolster its overall financial performance. The focus will be on leveraging the early successes of Solaire Resort North to navigate current challenges and enhance profitability in the coming quarters.