Net income of Leisure and Resorts World Corp. (LRWC) took a nosedive by 69.7 percent in the first quarter of 2018 after the Philippine-listed gambling firm pulled out their investments from the City of Dreams Manila (COD Manila) project.
Financial data provided by LRWC showed that its consolidated net income fell to PHP82.4 million ($1.57 million) in the first three months of the year from PHP272.1 million (US$5.46 million) reported in the same period last year.
LRWC noted that its consolidated income would have increased by PHP34 million ($649,338) if not for the series of unfortunate events that had happened in the company. The Philippine-listed firm mainly attributed the net income decline to its decision to divest PHP173 million ($3.3 million) from COD Manila project.
It would be recalled the LRWC, through its wholly-owned subsidiary AB Leisure Global Inc., sold its interest in COD Manila to Belle Corp. in November 2016. LWRC remained an investor of COD Manila until March 31, 2017.
Aside from divesting in COD Manila, LRWC also blamed the non-recognition of deferred PHP36 million ($687,534) tax assets and the PHP15 million ($286,472) pre-operating expenses of its Boracay casino project.
LRWC and its foreign partner, Macau-based casino operator Galaxy Entertainment Group, bagged a provisional license to construct a $500 million casino resort in the idyllic, holiday-island of Boracay in March. The plan, however, was put on hold after Philippine President Rodrigo Duterte ordered the closure of the island for rehabilitation.
The biggest chunk of LRWC came from its casino segment, which registered a net income of PHP106 million ($2.02 million). The figures were 35.7 percent higher than the PHP77.9 million ($1.49 million) it posted in the previous year.
LRWC’s full-owned slot arcade unit Blue Chip Gaming and Leisure Corporation posted a net income of PHP49.4 million ($943,450) during the January-March 2018 period, up 31.5 percent from last year’s PHP36.8 million ($702,813). Its gross gaming revenue also rose by 19.2 percent to PHP388.7 million ($7.42 million) from PHP326.2 million ($6.23 million).
The gambling firm’s junket unit Prime Investment Korean Inc. (PIKI), on the other hand, posted a net income of PHP13.78 million ($263,172), down 44.6 percent from PHP24.9 million ($475,544) during the same period last year.
For the online division, LRWC said First Cagayan Leisure and Resorts Corporation’s net income was up 141 percent to PHP24.36 million ($465,231) in the three months ending March 2018 from PHP10.11 million ($193,082) in Q1 2017.
Going forward, LRWC believes that First Cagayan’s revenues will continue to be affected by Philippine Amusement and Gaming Corporation’s (PAGCOR) adoption of the Rules and Regulations for Philippine Offshore Gaming Operators (POGO) in September 2016.
“Over the long-term, FCLRC is promoting the zone for investors and locators and has attracted a few licensees to locate their business in the Cagayan ecozone,” the company said.
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