Belle 1H2019 Net Income Declines on Weak Pacific Online Results

Belle Corp.’s (PSE: BEL) consolidated revenues reached PhP4.2 billion in the first six months of 2019, down 7% compared to the PhP4.52 billion achieved in the same period in 2018. Although Belle continued to experience growth at City of Dreams Manila, its overall operating performance was affected by weaker results at Pacific Online Systems Corporation (PSE: LOTO), which leases online betting equipment to the Philippine Charity Sweepstakes Office (PCSO) for their lottery and keno operations. As a result, Belle’s consolidated net income of PhP1.73 billion for the first half of 2019 was 11% lower than consolidated net income of PhP1.95 billion for the first half of 2018.

Belle’s gaming-focused subsidiary, Premium Leisure Corp. (PSE: PLC), registered an increase of 9% in its share in the gaming earnings of City of Dreams Manila, to PhP1.88 billion for the first half of 2019 from PhP1.73 billion for the comparable period in 2018. This, however, was offset by the performance of PLC’s 50.1%-owned subsidiary, Pacific Online, which posted a 49% decrease in revenues, from PhP1.09 billion for the first half of 2018 to PhP559 million for the first half of 2019. 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.

Belle’s real estate operations, meanwhile, saw a 4% increase in revenues, from PhP1.69 billion for the first half of last year to PhP1.75 billion for the first half of the current year. Of the current period’s real estate revenues, PhP1.33 billion came from Belle’s lease of the land and buildings comprising City of Dreams Manila to Melco Resorts and Entertainment (Philippines) Corp., which was a 16% improvement over the first half of 2018. Belle’s real estate sales and property management activities at its Tagaytay Highlands complex contributed the balance of PhP420 million.