Leisure & Resorts World Corporation (LRWC), a Philippines gaming operator and owner of First Cagayan Leisure and Resort Corporation (FCLRC) in the Cagayan Special Economic Zone, has announced a 40% fall in consolidated net income in the first half of 2017 to Ph362 million.
The company has attributed the decline from Ph600 million in 1H16 to “the reduction in FCLRC’s income from hosting fees,” stating that “changes in the regulatory environment, particularly in the last quarter of 2016 leading to 1H17, affected significantly FCLRC’s business and partly the retail business units as well.”
FCLRC is the primary issuer of licenses in the Cagayan Special Economic Zone.
LRWC’s net income declined 72% to Ph88 million in the second quarter, with the number of licenses it oversaw down from 116 to 88.
“Decline during the quarter are attributable to the significant loss of First Cagayan revenues when Pagcor issued POGO licenses and the decline experienced by ABLE due to challenges in the regulatory environment,” it said.
Casino operations fell considerably, with Prime Investment Korean Inc – which engages in junket operations at Midas Hotel and Casino – seeing revenues fall 6% and Hotel Enterprises Philippines Inc which owns Midas Hotel and Casino down from Ph36 million in 2016 to Ph20 million.
The online division fared considerably worse, with First Cagayan’s 1H17 revenues from the sector down 94% from Ph288 million to P18 million.
“The various divisions contributed a total Php517 million,” the company said.
“After deducting LRWC’s expenses, the consolidated net income totals Php 362 million for 1H17.”
Total revenues reflected a 13% year-on-year decline across all businesses.
“There are quite a number of challenges facing the company,” LRWC added. “Comparing the performance of LRWC’s core businesses without First Cagayan on a year-to-year basis, we see a 10% increase of other core businesses. This was achieved in spite of the regulatory challenges faced by LRWC. Management believes in being able to continue growing existing businesses in the future.”
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