Belle’s profit down in H1

Leisure estate and gaming firm Belle Corp. posted P1.73 billion in net profit in the first semester, 11 percent lower year-on-year, as competition from small town lottery gnawed on the earnings contribution of Pacific Online Systems Corp.

In a disclosure to the Philippine Stock Exchange, Belle said its six-month consolidated revenue reached P4.2 billion in the first six months, down by 7 percent from the previous year.

“Although Belle continued to experience growth at City of Dreams Manila (CoD Manila), its overall operating performance was affected by weaker results at Pacific Online, which leases online betting equipment to the Philippine Charity Sweepstakes Office (PCSO) for their lottery and keno operations,” the disclosure said.

Gaming-focused subsidiary, Premium Leisure Corp. (PLC) registered an increase of 9 percent in its share in the gaming earnings of CoD Manila to P1.88 billion for the first half of 2019. This, however, was offset by the performance of 50.1 percent-owned subsidiary, Pacific Online, which posted a 49-percent year-on-year decrease in revenue to P559 million for the first semester.

“This was due largely to competition from the small town lottery. Pacific Online is working closely with the PCSO and its network of agents to boost the attractiveness of the pari-mutuel games it offers, and is working to implement cost efficiency measures across its operations,” the disclosure said.

President Duterte ordered on Friday night all gaming activities of PCSO—lotto, small town lottery and Peryahan ng Bayan—to stop due to alleged “massive corruption” in the agency, casting more uncertainty on Pacific Online’s earnings.

Meanwhile, Belle’s six-month real estate operations grew revenue by 4 percent to P1.75 billion. Of these, P1.33 billion came from Belle’s lease of the land and buildings comprising CoD Manila to Melco Resorts and Entertainment (Philippines) Corp., which marked a 16-percent improvement year-on-year.

Belle’s real estate sales and property management activities at its Tagaytay Highlands complex contributed the balance of P420 million to the real estate business.

Belle’s principal asset, CoD Manila in Pagcor Entertainment City along Manila Bay, is being leased on a long-term basis to Melco. In addition to lease income, Belle’s 78.7-percent subsidiary PLC gets 50 percent of the gaming revenue from this integrated gaming resort.

Belle also owns about one hectare of presently undeveloped land across from the City of Dreams Manila site.