Belle Corp. said that putting the leisure industry in suspended animation from the start of the outbreak had resulted to the group’s consolidated net income to nosedive to P222 million for the first semester or 89 percent lower than the consolidated net income of P2.04 billion a year ago.
During the period, revenues dipped to P2.01 billion, down 52 percent compared to revenues of P4.2 billion a year ago.
Excluding extraordinary items, Belle’s consolidated recurring net income of P515 million for 2020 was 76 percent lower than the comparable figure of P2.16 billion for 2019.
Reductions in revenues and profits resulted primarily from coronavirus-related developments.
The effects of the pandemic began with declining tourist arrivals prior to the implementation of the community quarantines nationwide and was compounded by the temporary suspension of gaming operations at City of Dreams Manila on 16 March 2020 in compliance with government initiatives to contain the virus.
Belle’s primary growth driver, its share in the gaming revenues at City of Dreams Manila, declined by 87 percent, from P1.88 billion in the first six months against P248 million a year ago, as gaming operations remained suspended for the entire second quarter.
City of Dreams Manila is using this time to prioritize the health of its employees, to establish protocols that ensure a safe working and recreational environment and to support the government in keeping people safe in restarting the economy.
PCSO deals also halted
The pandemic also caused weak results at Pacific Online Systems Corp. which leases online betting equipment to the Philippine Charity Sweepstakes Office for their lottery and keno operations.
Pacific Online, which is 50.1 percent-owned by Belle’s subsidiary Premium Leisure Corp, posted a 68 percent decrease in revenues, from P559 million in the first six months of 2019 to P180 million for the same period in 2020.
With the exception of a few locations upon the easing of the quarantine in June 2020, outlets operated by Pacific Online were closed during the entire quarter.
Belle’s real estate operations recorded a 10 percent decrease in revenues, to P1.58 billion in the first six months of 2020 from P1.76 billion a year ago.
Of real estate revenues in 2020, P1.34 billion came from Belle’s lease of the land and buildings comprising City of Dreams Manila to Melco Resorts and Entertainment (Philippines) Corp., which were essentially unchanged from 2019.
However, Belle’s real estate sales and property management activities at its Tagaytay Highlands complex, which were affected by the community quarantines during the entire second quarter of 2020 and the Taal Volcano eruption in January 2020, contributed revenues of P244 million during 2020, which were 42 percent lower than in 2019.
Casino key to profitability
Belle’s principal asset is the City of Dreams, which is being leased on a long-term basis to Melco. In addition to lease income, Belle is accorded a share in revenues or earnings from City of Dreams Manila’s gaming operations through the operating agreement between its 78.7 percent-owned subsidiary PLC and Melco.
Belle also owns approximately one hectare of presently undeveloped land across from the City of Dreams Manila site.
South of Metro Manila, Belle owns significant real estate assets and develops premium residential resort projects around Tagaytay City.
Among its exclusive destinations are the club and golf facilities and residential communities of Tagaytay Highlands and Tagaytay Midlands, as well as a further 800 hectares intended for future development.