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POGO rules hurt LRWC 1Q18 results but casino division strong

Monday, 21 May 2018 07:00
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The Midas Hotel, home of Casino Filipino, in Manila

Leisure & Resorts World Corporation (LRWC) – the Philippines gaming company looking to partner with Galaxy Entertainment Group in developing an integrated resort in Boracay – saw its revenue fall slightly by 2% to Php3.86 billion (US$74 million) in 1Q18, its online operations taking a hit from PAGCOR’s new Philippine Offshore Gaming Operations (POGO) licensing system.

LRWC reported gross profit of Php878 million (US$16.8 million) and net income of Php82 million for the period, the company stating that its 69.68%-owned gaming infrastructure provider First Cagayan Leisure and Resorts Corp was now largely reliant on PAGCOR regulations.

“First Cagayan’s revenues declined because of PAGCOR’s POGO licensing model,” it said, pointing to First Cagayan’s 1Q18 net income of Php24 million.

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

LRWC’s casino division performed much better, with income up 36.8% to Php106 million thanks largely to subsidiary Hotel Enterprises Philippines (HEPI), which owns and operates the Midas Hotel and leases Casino Filipino inside the hotel to PAGCOR. HEPI brought in Php43 million in 1Q18, up 176% from Php15 million in the same period in 2017. 

Blue Chip Gaming and Leisure Corp, which leases slot machines and gaming equipment to five PAGCOR VIP slot arcades, saw its numbers rise slightly to Php323 million.

LRWC’s retail division also performed well with net income up 51% to Php69 million.

“LRWC believes it has hurdled its most challenging year yet in 2017,” the company said. “LRWC’s 2018 consolidated Q1 income of Php82 million shows the positive results of the turnaround situation that LRWC has achieved in the past year. This will reflect positively for 2018 and the coming years. 

“On a year-to-year comparison, 2018 Q1 is down from the same period last year in 2017. However, removing the non-recurring event in Q1 of 2017 with regard to the City of Dreams divestment, the 2018 Q1 pro-forma net income earnings would represent an 8% growth from the same adjusted period in 2017. 

“The company believes that the coming quarters and the following year will show increasingly positive income growth in all its divisions.”

 

 

 

 

 

 

 

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