Operators in the Philippines say they are moving ahead with their capital expansion projects, expressing optimism in the future of the market.
“We remain very committed to the long-term growth story of tourism and gaming in the Philippines,” PH Resorts Group Holdings Chairman Dennis Uy recently told shareholders. “While many challenges remain, we are confident of overcoming them as we see some recovery by the time the first phase of Emerald Bay is completed and opened to the public.”
PH Resorts is developing the Emerald Bay Resort on Mactan island, which is now scheduled to open in late 2021. Designed by Steelman Partners, the resort spans 12 hectares and will be the largest IR in the country outside of Manila.
PH says the debut will be late in the year, with the full Phase 1 offering to be available by the second quarter of 2022.
“Despite the challenges of COVID-19 we are diligently working on the completion of the first phase of Emerald Bay,” Chief Operating Officer Jose Angel Sueiro said. “Our team continues working to ensure to reduce project costs without sacrificing quality. Our focus is getting Emerald Bay to open on time without cutting corners.”
Emerald Bay will have a total of 146 gaming tables and 729 electronic gaming machines (EGMs) as well as 780 hotel rooms and 5 villas.
In the early opening phase it will have 122 gaming tables for mass, premium mass and junkets, 600 EGMs and 270 hotel rooms.
Bloomberry Resorts & Entertainment also expressed confidence in the market’s future prospects saying it’s going ahead with its plans for a second IR in Quezon City, known as Solaire North.
Chairman and CEO Enrique Razon said it believes the opening of the resort will “coincide with a meaningful upcycle that is typical after a period of economic weakness.”
Bloomberry is now targeting a late 2022, or early 2023 launch for the property, which will be on a 15,676-square-meter piece of land and will be very similar to the original Solaire’s layout. It will be targeted at the mass market and in particular to locals.
Hong Kong-listed Suncity Group Holdings is also showing its commitment to the market, putting up an additional $82 million deposit to Westside City Resort World.
This represents the third refundable deposit following earlier installments of US$20 million and US$46 million, making a total of US$148 million.
Moreover, Suntrust currently has until December 31 to raise at least US$300 million for the construction and development of the project, under the terms of the agreement.
In February, Suncity announced that its local SunTrust unit had signed a twenty-year lease agreement with Westside to develop and operate its casino hotel as part of the junket group’s extensive expansion plans.
Suncity acquired a controlling stake in SunTrust last year for the rights to build a five-star hotel with at least 400 rooms, a casino with 400 gaming tables, and 1,200 slot machines for both mass and VIP markets, and a 960 space parking lot.
Under the lease agreement, Suntrust will pay an annual rental fee of US$10.6 million, commencing on the first day of operations of the casino and payable in two installments on a semi-annual basis.
Landing International, whose Manila project was shut down on the day it broke ground due to irregularities in the land lease, is also still keen to move ahead with a project in the Philippines.
The company had been ordered by the Philippine Amusement and Gaming Corp to find an alternative site, which it hasn’t been able to do because of the lockdown.
It has now been granted an extension to the deadline to find the land.
Casinos in metro Manila have been closed since March as part of a strict community lockdown. They are now being allowed a limited reopening at 30 percent of capacity after having only been allowed to accept selected VIP guests to maintain training and facilities during the shutdown.
City of Dreams
The $1.3 billion City of Dreams Manila is owned by Belle Corp and Melco Crown Entertainment’s local unit. City of Dreams Manila has six hotel towers with approximately 950 rooms in aggregate, including VIP and five-star luxury rooms and high-end boutique hotel rooms, a wide selection of restaurants and food & beverage outlets and a 4,612.44 square meters family entertainment center in collaboration with Dreamworks Animation.
For the second quarter, Melco Resorts Philippines posted a net loss of P2.4 billion (US$49.3 million) due to the closures.
City of Dreams Manila’s rolling chip volume was US$0.15 billion versus $1.90 billion in the second quarter of 2019. Mass market table games drop decreased to $7.5 million, compared with $192.8 million in the second quarter of 2019. Total non-gaming revenue was $1.4 million, compared with US$31.8 million in the second quarter of 2019.
Tiger Resort Leisure and Entertainment
Okada Manila, owned by Japan’s Universal Entertainment, is the largest resort in Entertainment City and the last to enter the market, with a soft opening in 2016.
Net sales at Okada Manila fell 48.8 percent year-on-year in the first six months of 2020, to nearly JPY16.10 billion, while its first-half operating loss widened to nearly JPY5.27 billion, versus JPY1.82 billion in the same period of 2019.
The parent company also said it has postponed a deal reached in February to sell land adjacent to the Okada Manila site in a deal worth about PHP13.18 billion. It said it expected to move ahead with the transaction in the future, but said the transaction may be amended.
Bloomberry Resorts’ Solaire was the first IR to open in Entertainment City and is a 16-hectare integrated resort. The Bay Tower of Solaire consists of a casino with an aggregate gaming floor area of approximately 18,500 square meters (including 6,000 square meters of exclusive VIP gaming areas), with about 1,400 slot machines, 295 gaming tables and 88 electronic table games.
Bloomberry reported a 95 percent drop in gross gambling revenue during the three months through to end-June to P686 million. The company swung to a loss of P4.7 billion, compared with a profit of P2.5 billion in the same period last year.
Solaire’s VIP, mass table, and EGM GGR in the second quarter were P121.7 million, P303.7 million, and P261.1 million, representing year-over-year declines of 98 percent, 93 percent, and 94 percent.
Resorts World Manila
Travellers International Hotel Group, a joint venture between Genting Hong Kong and Alliance Global, is the owner and operator of Resorts World Manila. The hotel room count for the group’s three hotels (Maxims Hotel, Remington Hotel, and Marriott Hotel Manila) remains at 1,226.
The group recorded a net loss of P3.7 billion in the first half of 2020.
The company’s casino was closed from mid-March and was given the green light to operate at 30 percent capacity from the end of August. Prior to that the resort was only permitted to invite select guests for so-called dry-run operations.
Gaming net revenues fell 59 percent year-on-year to P4.4 billion, while non-gaming revenues fell 44 percent to P1.7 billion, due to foot traffic decline as well as the closure of the theatre, cinemas and retail outlets.
The hotel has been operating at limited capacity with occupancy ranging between 29 percent to 60 percent in the first half of the year.
Waterfront turns profit despite Covid-19
Waterfront Philippines Inc recorded a narrowed profit in the second quarter of 2020, reaching P37.6 million (US$773,086), despite community quarantine lockdown affecting casinos in the region. The company said the beginning of Q2 was “quite a downturn” as the COVID-19 pandemic struck, severely affecting occupancy and volume of revenue for all three of its properties.
The company runs two casino hotels in Cebu, including the Waterfront Cebu City Hotel and Casino and Waterfront Mactan Casino Hotel, and one in Manila, the Waterfront Manila Hotel and Casino. Net income fell 77.7 percent to P105.8 million in the quarter ending June 30, 2020, down from 187.9 million in the prior-year period. Revenue fell 25.9 percent to P702.7 million.
HatchAsia extends lifeline to Silver Heritage
HatchAsia has put forward a proposal to take over Silver Heritage and inject A$530 million (US$387 million) in cash into the ailing company. Hatch will buy shares equivalent to 92 percent of SVH’s issued shares from existing shareholders and the issue of new shares. The settlement involves $530 million in cash and 3 percent of the issued shares.
The successful conclusion would eventually result in the HatchAsia shareholder-controlled entity being listed on the Australian Stock Exchange and Philippine affiliate DFNN owning part of the ASX Listed Entity. “As a shareholder, we welcome and look forward to the foray of HatchAsia in the international market.
A move that will consequently provide us better access to a wider capital base as well as create new business streams for a larger audience reach that will pave the way for more Philippine businesses to globalize.
Tapping the Australian capital market for this provides a conducive environment for the nature of our businesses and allows DFNN to fully value its early investments in HatchAsia”, says Calvin Lim, CEO of DFNN and incoming director of HAI.