Expenses drag down Solaire’s numbers but Razon predicts profit in 2014

bloomberry-solaire-casinoBloomberry Resorts Corp’s Solaire Resort & Casino recorded a net loss of P1.31b (US $29.6m) in 2013, twice the loss recorded in 2012. But Bloomberry chairman Enrique Razon Jr. expects the facility will turn a project in 2014. The boyish billionaire said the bulk of 2013’s red ink stemmed from pre-operating expenses in the run-up to Solaire’s opening last March.

Minus those expenses, Bloomberry’s net loss would have been 80% lower. Earnings during Solaire’s 10 months of operation last year came to P1.12b, which would have risen to P2.2b ($49.6m) except for those pre-operating expenses. Overall expenses rose 14-fold to P13.5b and Solaire splashed out P3.4b on promotional allowances, discounts and rebates.

On the plus side, Solaire’s opening boosted Bloomberry’s revenue to P12.34b ($278.6m), a 63-fold increase over 2012. Nearly 93% of this was gaming revenue with hotel, food and beverage accounting for just 6.2%. Retail and other revenue added the other 1%. Foot traffic at Solaire now tops 16k per day on the weekends, almost rivaling the 18k tally recorded at Genting Hong Kong’s Resorts World Manila casino.

Razon said Solaire expects to complete its next phase, which includes a 100-room hotel, theater and retail outlets, by the end of October or early November. That’s around the same time that Melco Crown Entertainment’s City of Dreams facility is set to open, the second of four resort casino projects planned for Manila’s Entertainment City development. But Razon says he’s not bothered by the threat of competition, saying the addition of new competitors “will increase the size of the market.”