April 01, 2014

BLOOM reports 2013 net loss of P1.3b.

In a disclosure to the Exchange, Bloomberry Resorts (BLOOM) reported a net loss of P1.315b for 2013. This indicates that the company turned to a net loss of P447m in 4Q13 after posting its first quarter of profit of P165m in 3Q13. This can be partly traced to a change in its provisions for taxes which reversed to a tax expense ofP155m for 2013 from a benefit from income tax of P405m in 9M13. Excluding the 4Q13 tax liability of P560m, pretax profit for 4Q13 would have been P113m brought about by FX gain of P232m.

Gross gaming revenues rose 15.8% QoQ to P5.64b but this was more than offset by the huge increase in promotional discounts which almost doubled to P1.87b in 4Q13 from P985m in 3Q13 resulting in a net decrease in revenues by 1.7%. EBITDA is likewise lower at P739m in 4Q13 vs P807m in 3Q13. EBITDA for the year was at P1.1b.

Our take: The results were below market consensus forecasts of P475m in net loss, P13.2b in revenues and P1.6b in EBITDA. While the slowdown in 4Q13 appears to be an industry-wide incident as seen earlier in the results of Travellers International (RWM), the more measured decline in BLOOM’s 4Q13 operations suggests it gained some ground vs RWM for the quarter albeit at high promotional expense.

It remains to be seen if BLOOM will be able to grow its revenues and market share as it normalizes promotional and advertising expenditures until new competition sets in (with the opening of Melco Crown Phils Resorts Corp’s (MCP) City of Dreams Manila later this year). We also anticipate BLOOM’s pre-operating expenses to ease this year. – WealthSec