LRWC profit up despite drop in casino income
April 19, 2016
By Roy Stephen Canivel
The BusinessWorld Online
19 April 2016
THE majority owner of the online gaming license-holder at the Cagayan Freeport and Special Economic Zone saw its profit grow by more than a third in 2015 despite lower income from its casino operations.
In a disclosure to the Philippine Stock Exchange, Leisure & Resorts World Corp. (LRWC) said it earned P1.030 billion last year, a 37% increase from the P750 million in 2014.
This as consolidated revenues reached P9.510 billion in 2015, up 40% from the P6.8 billion the previous year.
In the fourth quarter alone, net income rose 3% to P229 million from the year before’s P223 million.
Accounting for about half of LRWC’s full-year profit, the online gaming business at the Cagayan Freeport turned in P516 million, a 19% increase from the P432 million in 2014.
LRWC owns 69.68% of First Cagayan Leisure and Resorts Corp., the master licensor for online gaming at the Freeport.
First Cagayan Converge Data Center, Inc., which is a joint venture with IP Converge, contributed another P74 million to LRWC’s full-year earnings, also higher than the P52 million in 2014.
Besides its Cagayan Freeport businesses, LRWC also saw its retail division turn in a 30% increase in income at P256 million last year from P198 million in 2014.
Fully-owned bingo operator AB Leisure Exponent (ABLE) accounted for 95% of the retail division’s income contribution. This was up 27% from P193 million in 2014 on the strength of ABLE’s electronic bingo game (EBG) operations.
ABLE operates 8,500 EBG machines.
The income contribution of e-casino outlet operator Total Game Zone Xtreme (TGX) was flat at P12 million. TGX, which LRWC also fully-owns, is still in expansion mode, and has increased its network of e-casino terminals to 1,900 so far.
CITY OF DREAMS INVESTMENT
LRWC’s property division turned in the fastest growth in earnings, largely from its investment in the City of Dreams Manila. At P353 million, the property division’s 2015 income contribution was 256% more than the P99 million the previous year.
Fully-owned AB Leisure Global, Inc. earned P142 million last year. The company has a 30% share in the lease paid by Melco Crown Philippines (MCP), as well as a share in the gaming revenue that MCP remitted to Premium Leisure and Amusement, Inc. (PLAI). MCP operates the City of Dreams.
LR Land Developers, Inc., another fully-owned company, contributed P77 million to LRWC last year. LR Land leases land and a cyberpark building to online gaming operators in Cagayan. The company also owns 50% of TechZone Philippines, Inc., which built a 43,000-square meter 32-storey building in Makati City that is being leased out to business process outsourcing (BPO) firms.
The only drag to LRWC’s 2015 earnings was its casino division, whose contribution of P85 million was 21% lower than the P107 million in 2014.
The casino division includes Hotel Enterprises Philippines, Inc., which is majority owner of Midas Hotel.
Despite the weakness in its casino division, LRWC said its “core businesses continue to show very robust growth and management believes in being able to continue this for the future.”
Category: In The News