LRWC Q1 profit drops 70 percent

Leisure & Resorts World Corp. said its Q1 profit dropped nearly 70 percent following its divestment from the City of Dreams, non-recognition of deferred tax assets and pre-opening expenses from a planned casino on Boracay.

Net income came in at PHP272.1 million ($5.2 million), the group said in a statement to the Philippine Stock Exchange. Without the above items, LRWC said its net profit would have been PHP 34 million, or 70 percent, higher.

LRWC is a holding company, which owns online licensor First Cagayan Leisure and Resort Corporation and bingo gaming group, AB Leisure Exponent, known as Bingo Bonanza. It owns a 51 percent share in the Midas Hotel and Casino in Manila and junket operation Prime Investment Korea. The company has also teamed with Galaxy Entertainment to develop a $500 million IR on Boracay, though the future of the project is uncertain given President Rodrigo Duterte’s temporary closure of the island to tourism and opposition to further casino development.

The company posted a 19 percent increase in casino revenues to PHP388.6 million, while revenue from junket operations declined 4.4 percent to PHP933.1 million due to a poor win rate of 3.06 percent compared with 4 percent in the same period a year earlier.

The company posted a 1.4 percent gain in its bingo division, which is the biggest contributor to revenue, to PHP2.35 billion.

The company saw 5.9 percent growth in electronic bingo and 1.5 percent growth in electronic games, but posted a 1.3 percent drop in its traditional bingo product and a 10 percent decline in rapid bingo.

Total GGR gained 2 percent to PHP3.86 billion.

Revenue from the online division was down almost 21 percent at PHP29.7 million, though net income rose due to strict cost controls. The company said the drop in revenue was due to the decision by the Philippine Gaming and Amusement Corp. to begin offering its own online licenses.

“Going forward, FCLRC’s revenues will continue to be affected by PAGCOR’s adoption of the Rules and Regulations for POGO last September 2016,” it said. “Over the long-term, FCLRC is promoting the zone for investors and locators and has attracted a few licensees to locate their business in the Cagayan ecozone.”