Philippine-listed casino investor Premium Leisure Corp. (PLC) is considering a stake in the ownership of Melco Resorts and Entertainment Philippines (Melco Philippines), operator of City of Dreams Manila.
In a disclosure to the Philippine Stock Exchange on Friday, Melco Philippines reported that there are discussions for PLC to become an equity holder of Melco Resorts and Entertainment Ltd.’s Philippine unit.
PLC, through its unit Premium Leisure and Amusement, Inc. (PLAI), is a co-licensee of City of Dreams Manila, one of the integrated resorts within the Philippine Amusement and Gaming Corporation’s Entertainment City.
In a statement, Melco mentioned “a potential transaction whereby PLC or its affiliated entities may become equity holders” of the casino operator, noting “certain affiliated entities of PLC are currently parties to an operating agreement with Melco” in the Philippines.
Last week, Melco Philippines reported that its total net operating revenue for the first three months of 2018 dropped by 7 percent to PHP7.35 billion (US$140.37 million) from PHP7.88 billion ($150.49 million).
The firm attributed the decline to the adoption of the New Revenue Standard (NRS), which resulted in higher commissions paid to gaming promoters being deducted from casino revenue. Some PHP2.43 billion ($46.40 million) in commissions was paid to gaming promoters and complimentary goods and services deducted from casino revenue in the current period as a result of the adoption of the NRS.
The deductions resulted in casino revenue falling 20 percent to PHP5.84 billion ($111.53 million) in Q1 2018. If not for the NRS, Melco said that its net operating revenue would have been PHP8.6 billion ($164.24 million).
Net profit of Melco Philippines was PHP532.0 million ($10.16 million), up 258 percent from PHP148.6 million ($2.83 million).
