Maybank Securities is forecasting gross gaming revenues of Php13.1 billion (US$235 million) and profit of Php1.6 billion (US$28.7 million) for the Philippines’ Bloomberry Resorts in 2Q23, down by 13% and 48% respectively over its strong Q1 results.
In a note, analyst Miguel Sevidal attributed the expected decline to the fact Bloomberry had benefited from above-average hold in both mass and VIP during the March quarter, while the June quarter also tends to be “seasonally weak”.
There is, however, scope for upside surprise should hold rates remain strong or VIP volumes rise further.
“Despite the sluggish recovery of Chinese tourist arrivals, we are encouraged by the strong comeback of Korean tourism, which has provided a meaningful boost to VIP GGR,” Sevidal said.
The analyst also oberves that shares in Bloomberry, operator of Manila’s Solaire Resort Entertainment City, are down 9% month-on-month due to concerns about the sustainability of GGR, a recent Court of Tax Appeals decision ordering the company to pay Php49 million (US$876,000) in unpaid taxes, and the recent selling by beneficiaries of the firm’s stock-incentive plan.
However, only the first two points offer any potential threat to earnings, and the tax payment – should Bloomberry lose an appeal – translates to a small 0.2% increase in cash opex and a 0.5% hit to FY23E earnings.
Sevidal describes the current price of Bloomberry shares as an “attractive entry point for the name” as it represents a 37% discount to Macau peers.
“We forecast Bloomberry is still set to deliver year-on-year EPS (earnings per share) growth of 91% and 48% for FY23 and FY24,” the analyst wrote.
“Quarter-on-quarter growth should also be positive in 3Q23/4Q23 due to seasonal factors, and 2Q24 onwards due to the ramp-up of the new Solaire Resort North.”
