Belle Corporation, a major player in the Philippines’ gaming and real estate sectors, recently released its financial report for the first half of 2024. The company reported significant financial challenges, including a notable decline in revenue, increased operational costs, and a significant shift in its executive leadership.
Revenue Overview: A Year-on-Year Decline
Belle Corporation’s net revenue for the first half of 2024 amounted to PHP882.4 million (approximately US$15.4 million). This figure represents a substantial 33% year-on-year decrease, down by PHP427.2 million from the PHP1,309.6 million reported in the same period of 2023. This decline marks a challenging period for the company as it grapples with various market and operational factors that have impacted its financial performance.
The company’s consolidated revenue, which includes income from all its subsidiaries and business units, stood at PHP2,729.4 million. This figure reflects a 6% decline from the previous year, signaling a broader slowdown across its diversified business portfolio.
Lease Income
The company’s lease income saw a slight increase in the first half of 2024, reaching PHP1,160 million. This growth in lease income highlights the resilience of Belle’s real estate leasing operations, which have managed to perform steadily despite the challenging economic environment.
Real Estate and Property Management
The company also reported an increase in sales and revenue from its real estate and property management services. This sector’s growth is a positive indicator of the sustained demand for real estate and property management services in the Philippines, particularly in key urban areas where Belle operates.
Gaming Revenue
In contrast to the positive performance in its real estate sector, Belle’s gaming revenue experienced a significant downturn. The company reported a 24% decrease in gaming revenue, amounting to PHP943 million in 2024. This decline includes the gaming revenue share from Belle’s subsidiary, Premium Leisure Corp, which operates in partnership with Melco at City of Dreams Manila. The downturn in gaming revenue reflects the broader challenges faced by the gaming industry in the Philippines, including increased competition and operational costs.
Rising Expenses: A Major Factor in the Revenue Decline
One of the critical factors contributing to Belle Corporation’s financial decline is the significant increase in its operational expenses. The company’s total expenses in the first half of 2024 amounted to PHP1,600 million, a considerable sum that includes general administrative expenses, property management services, and the maintenance costs associated with gaming operations.
In addition to these operational costs, Belle also incurred PHP339 million in interest and other financial expenses. Combined, these expenses represent almost 70% of the company’s total gross revenue of PHP2,729 million. The high expense ratio highlights the financial strain that rising costs have placed on the company, eroding its profitability and contributing to the overall revenue decline.
Executive Leadership Change: A New CFO Takes the Helm
In the midst of these financial challenges, Belle Corporation has also undergone a significant change in its executive leadership. Maria Neriza C. Banaria, who served as the company’s Chief Financial Officer (CFO) and Treasurer, has resigned from her position, effective 14 August 2024. Banaria’s resignation marks the end of her tenure at Belle during a crucial period of financial and operational restructuring.
To fill the critical role of CFO, Belle Corporation has appointed Aileen M. Malto, effective 15 August 2024. Malto brings a wealth of experience to the position, having previously served as the CFO of SteelAsia Manufacturing Corporation and St. Luke’s Medical Center. A Certified Public Accountant with over two decades of experience in finance, Malto is expected to play a pivotal role in steering Belle through its current challenges and positioning the company for future growth.
Strategic Moves: New Casino License Application
Despite the financial setbacks, Belle Corporation continues to pursue strategic initiatives aimed at expanding its footprint in the gaming industry. In July 2024, the company’s subsidiary, Premium Leisure, applied for a new casino license in Clark City. This move is part of Belle’s broader strategy to diversify its gaming portfolio and capitalize on the growing demand for gaming and entertainment in the Philippines.
The application for a new casino license in Clark City reflects Belle’s commitment to maintaining a strong presence in the Philippine gaming industry, despite the current challenges. If approved, the new casino could provide a significant boost to the company’s gaming revenue in the coming years, helping to offset the recent declines and contribute to overall business growth.
Belle Corporation’s financial performance in the first half of 2024 underscores the complex and challenging landscape in which the company operates. The significant decline in net revenue, coupled with rising operational costs and a shift in executive leadership, presents a formidable set of challenges for the company.
However, Belle’s continued growth in lease income and real estate sales, as well as its strategic move to expand its gaming operations with a new casino license application, indicate that the company is actively seeking to navigate these challenges and position itself for future success.
As Belle Corporation moves forward under the leadership of its new CFO, Aileen M. Malto, the company’s ability to manage its expenses, capitalize on growth opportunities, and maintain its competitive edge in the gaming and real estate sectors will be crucial to its long-term success. The coming months will be a critical period for Belle as it implements its strategic plans and works to restore its financial health and shareholder value.