Deadly incident weighs on outlook for Resorts World Manila operator
THE OPERATOR of Resorts World Manila (RWM) on Monday said it is voluntarily suspending operations at its casino and other facilities affected during a deadly attack by a lone gunman last week.
“The company’s position is that Resorts World Manila is voluntarily suspending its operations in affected facilities (especially the gaming areas) until all investigations are concluded by the Philippine National Police and Bureau of Fire Protection and safety is certified by appropriate authorities,” Travellers International Hotel Group, Inc. ( TIHGI) told the stock exchange.
Operations of Remington Hotel, Belmont Hotel, and Marriott Hotel, also located within the RWM complex in Pasay City, will continue, a company representative said in a text message.
At the same time, TIHGI postponed its annual stockholders’ meeting scheduled for June 9, “out of deference and sympathy” to the families of the 35 casualties from the June 2 incident.
The 13 RWM employees and 22 guests died due to suffocation after a gunman, identified later as Jessie Javier Carlos, stormed the casino and set gaming tables on fire before killing himself.
“This tragedy makes investors feel pessimistic about the company... We expect that RWM price will go down further because of the tragedy,” UPCC Securities Corp. equity trader Aristotle D. Reyes, Jr. said in a telephone interview.
Mr. Reyes, however, noted investors have already been pessimistic on TIHGI even before the attack, noting its share price has slipped significantly from its initial public offer of P11.
On Monday, shares of the joint venture of tycoon Andrew Tan’s Alliance Global Group, Inc. (AGI) and Genting Hong Kong Limited continued to drop, closing 0.96% or three centavos lower to P3.10 each.
“There’s a closure, so you have to compensate for the loss, expenses, renovations, and the investor’s confidence, the public’s confidence. Because for example, people like me would go to other gaming companies like MCP (Melco Crown Philippines) and Bloomberry (Resorts Corp.), it’s within the Entertainment City,” Mr. Reyes added.
An equities analyst from Meridian Securities, Inc., who declined to be identified, said the incident serves as a wakeup call for RWM to beef up their security, and improve operational efficiency.
“This gives them a chance to regroup again and start planning the upgrade of their services,” the analyst said.
TIHGI’s net income dropped by 40% to P685 million for the first quarter of 2017, as net revenues also slipped by 3.4% to P5.8 billion.
In 2016, the listed company’s earnings declined 15% to P3.4 billion, following a 2.3% drop in gaming revenues to P23.65 billion. The company also attributed the decrease in earnings to unrealized foreign exchange losses on Travellers’ outstanding bond amounting to $300 million. The weaker peso also doubled the company’s financing expenses to P1.46 billion.
The negative effects of the RWM incident proved to be temporary for the gaming sector, as MCP and Bloomberry shares rose at the local bourse on Monday.
Shares in MCP, which operates City of Dreams Manila, went up by 33 centavos or 3.41% to close at P10 each. Shares in Bloomberry, which operates Solaire Resort and Casino, likewise jumped by 30 centavos or 3.23% to P9.60 apiece.
“I don’t think there will be an effect, it’s an isolated incident. Because the security for Melco Crown and RWM are different anyway. So you cannot tell that the gaming industry in the Philippines is not good because of the security, it’s not like that,” Mr. Reyes said.
Sought for comment via e- mail, Bloomberry said it has thorough security measures in place to ensure a safe environment for both customers and employees, adding they have 24/7 security and surveillance measures throughout the entire property, as well as an intelligence program that keeps them alert for any suspicious characters or movements.
“We also comply and cooperate with the security measures of Entertainment City, and have direct links to police authorities should an untoward incident arise,” Bloomberry said.
Solaire Resort and Casino, City of Dreams Manila, and Okada Manila, operate inside Entertainment City, a gaming and entertainment complex in Bay City which spans the cities of Parañaque, Manila, and Pasay.