According to a recent communication from Morgan Stanley Asia Ltd, the forthcoming resort from Philippine casino operator and developer Bloomberry Resorts Corp is anticipated to significantly bolster the company’s earnings starting from the latter part of this year.
Bloomberry currently operates Solaire Resort & Casino in Manila’s Entertainment City and is also in the process of constructing Solaire Resort North in Quezon, situated to the north of Manila, with an expected opening in the second quarter of 2024.
Typically, it takes one to three quarters for an integrated resort in the Philippines to achieve profitability in terms of earnings before interest, taxation, depreciation, and amortization (EBITDA). Analysts Gareth Leung and Praveen Choudhary predict that Solaire North will attain positive EBITDA in the third quarter of 2024, reaching PHP8 billion (US$142.2 million) by 2025, which is approximately 40 percent of the full-year 2023 EBITDA of the existing property.
This translates to roughly a 15 percent return on the investment of around US$1 billion for the project. Solaire North’s performance is expected to benefit from the same membership system utilized by Solaire at Entertainment City.
Another brokerage suggests that Solaire North will introduce around 150 mass tables and approximately 2,500 slot machines by the first half of 2024, expanding Bloomberry’s offerings.
Morgan Stanley highlights Quezon City as an ideal location for a casino resort due to its advanced infrastructure and status as one of the wealthiest and most significant sources of local gamblers for Entertainment City.
In the third quarter of 2023, Bloomberry reported consolidated EBITDA of nearly PHP4.20 billion, marking a 15.1 percent increase from the previous year. Revenues for the same period totaled PHP10.74 billion, a 6.7 percent rise from the prior year.
Morgan Stanley projects Bloomberry to achieve full-year 2023 EBITDA of PHP19.56 billion, up from PHP14.19 billion in 2022, although this estimate is 7 percent lower than a previous forecast due to a weaker second half of 2023. Considering a delayed opening of Solaire North and slower growth in Entertainment City, Bloomberry’s EBITDA could reach PHP21.28 billion in the current year, a 12 percent decline from a previous Morgan Stanley estimate.
Having another casino that is outside Entertainment City would be a big help to this who live farther from it. Given the traffic situation in Metro Manila, the closer the venue is to the players, the more incentive they have to play more as well.
