April 29, 2014

BLOOM nets P1.46b in 1Q14

In a disclosure to the Exchange, Bloomberry Resorts (BLOOM) announced 1Q14 net income of P1.46b. The company reported total gross revenues of P7.38b on the back of surge in gross gaming revenues which grew 25%QoQ to P7.06b. Gaming revenues accounted for 95.7% of total revenues; hotel and food & beverage revenues contributed 3.9%; and retail and other income accounted for 0.4%. 1Q14 EBITDA reached P2.15b which is almost equivalent to the full-year EBITDA in 2013. BLOOM’s gaming facility commenced operations in mid-March last year.

Our take: BLOOM’s significant improvement in profitability was brought about by huge jump in revenues and easing promotional expenses. Note that in the previous quarter (4Q13), BLOOM was able to grow gross gaming revenues 16% but at huge promotional cost which almost doubled from P985m in 3Q13 to P1.87b in 4Q13. In1Q14, the company was able to grow gross gaming revenues 25% QoQ while decreasing promotional spending 25% to P1.39b.

This impressive feat resulted in EBITDA margins doubling to 36% from the previous quarter. EBITDA likewise almost doubled to P2.15b which is ahead of consensus forecasts by 10%. While BLOOM’s 1Q14 results are impressive, it remains to be seen if the company can keep a tab on promotional spending and maintain revenue growth momentum especially in light of the expected competition that will be spurred by the opening of MCP’s City of Dreams. – WealthSec