Travellers International Hotel Group posted an almost 52 percent drop in Q2 net profit as costs rose and a one-time gain reported last year wasn’t repeated, though revenue growth was strong.
The operator of Resorts World Manila had net profit of PHP599.2 million ($11.4 million), down from PHP1.24 billion the prior year. The company posted a gain from other income of PHP1.47 billion last year, compared with none in this quarter.
Net revenue jumped to PHP6.72 billion from PHP4.68 billion in the same quarter of 2018.
The company said the increase in revenue was primarily due to an improvement in both VIP and mass market gaming revenue due to an increase in capacity, coupled with the addition of 747 new hotel rooms following the opening of Hilton Manila Hotel in the fourth quarter last year and Sheraton Manila Hotel in January 2019.
Gross gaming revenues increased by 46.8 percent to PHP6.64 billion.
As of the end of June, the company was operating 169 VIP tables, up from 131 the prior year Direct costs rose by 35.5 percent in the period to PHP3.52 billion and promotional allowances increased from PHP907.9 million to PHP1.355 billion.
Direct costs are related to gaming operations and the increase was primarily due to the increase in gaming license fees, higher casino operating expenses as a result of the ramp up of the Grand Wing, and higher hotel operating expenses as a result of the opening
of the Hilton Manila Hotel and Sheraton Manila Hotel.
Finance costs also rose to PHP982.5 million for the six months from PHP43.9 million due to an additional drawdown from the company’s loan facility and higher interest rates.