In this photo taken on March 12, 2013, employees at the giant Solaire Resort and Casino Manila practice at gaming tables ahead of the opening on March 16, 2013. Solaire Manila Resorts is the first of four enormous entertainment venues slated to rise over a giant chunk of prime, reclaimed land that industry and government leaders expect will attract millions of cashed-up Asian tourists. ©AFP PHOTO / Jay DIRECTO
Manila, Philippines | AFP | – The owner of the Philippines’ first mega-casino on Friday said its second-quarter profits halved amid an industry wide slump that could threaten the country’s bid to become a top gaming destination.
Travelers International Hotel Group, operator of Resorts World Manila, said net income for the April to June period fell 46.78 percent from a year earlier to 619.04 million pesos ($13.4 million) as gaming revenues declined.
The results, which missed the 1.39 billion pesos analyst forecast compiled by Bloomberg News, come after rivals also reported disappointing results due to a slump in Chinese visitors and rising costs.
Travelers’ first-half net profit fell 18 percent to 2.36 billion pesos, after surging over the same period last year, the company said in a stock exchange filing.
“The outlook on the casino industry is negative. The mass market is not growing as fast as everyone expected,” Angping and Associates Securities research chief Jose Rafael Supangco told AFP.
Bloomberry Resorts, owner of the Solaire casino, said Thursday it swung into the red in the second quarter due to higher costs from new investments.
Last week, Melco Crown (Philippines), which runs City of Dreams Manila, said net losses for the same period widened to 1.82 billion pesos.
A corruption crackdown by Beijing and a festering territorial dispute between Manila and Beijing appear to be discouraging big-spending Chinese tourists from visiting the Philippines, Supangco said.
Poor roads in the capital Manila are also hampering the government’s hopes of seeing $7 billion in annual casino revenues by 2020, on a par with Singapore and Las Vegas.
The gaming regulator remained optimistic, however, telling AFP in a statement: “The opportunity for the Philippines to be a major regional entertainment destination remains very strong.”
Travelers said net first-half revenue fell 13.5 percent to 12.47 billion pesos, hit by a poor performance in gaming and a fall in its mall, theatre and cinema operations.
Foreign exchange losses also cut net profit by 426 million pesos for the January to June period as the US dollar strengthened against the peso, it said.
Travelers shares were up 0.19 percent before noon in Manila as investors stuck with the casino pioneer but sold shares in its rivals amid a fall in the broader market.