Bloomberry Resorts Corp, the parent company of the well-known Philippine integrated resort brand Solaire, has recently introduced a new dividend policy that signifies a strategic shift in how it rewards shareholders. This policy, which the Board of Directors approved on Tuesday, will see the company distributing annual dividends equivalent to 35% of the previous year’s audited consolidated Earnings Per Share (EPS). This approach aims to provide a reliable and substantial return to investors, reflecting Bloomberry’s commitment to shareholder value.
Understanding the New Dividend Policy
The newly announced dividend policy is designed to enhance shareholder returns by linking dividends directly to a percentage of the company’s EPS. By doing so, Bloomberry intends to offer a predictable and appealing dividend yield to its shareholders. The policy ensures that dividends are drawn from the company’s unrestricted retained earnings, complying with legal requirements. Importantly, the timing and amount of these dividends will be determined at the discretion of the Board of Directors. They will take into account a variety of factors, including contractual restrictions from debt facilities and the company’s overall financial health.
This strategic shift is meant to balance the need for consistent shareholder returns with the company’s long-term growth and financial stability. By setting a clear percentage for annual dividends, Bloomberry aims to align shareholder interests with the company’s earnings performance, providing a more structured and transparent approach to dividend payments.
Financial Results for 2Q24
The announcement of Bloomberry’s new dividend policy comes in the wake of its second-quarter 2024 financial results. The company reported a significant drop in net income, which fell to Php1.3 billion (US$22.8 million) from Php3.4 billion (US$59.7 million) during the same period the previous year. This decline highlights the challenges Bloomberry is facing as it manages lower VIP volumes and incurs substantial costs associated with the opening of Solaire Resort North in Quezon City.
The reduction in VIP customer volumes has adversely affected revenue, while the costs related to the new resort have placed additional financial pressure on the company. These factors have contributed to the overall decrease in profitability, underscoring the need for careful financial management.
Implications for Future Performance
As Bloomberry moves forward with its new dividend policy, the company’s ability to maintain financial stability while navigating current challenges will be crucial. The Board’s evaluation of economic conditions, business performance, and financial health will influence future dividend payouts and overall strategic direction. This approach reflects a broader effort to balance short-term shareholder returns with long-term investment in growth and development.
Bloomberry Resorts Corp’s new dividend policy marks a significant development in its approach to shareholder returns. Despite the recent decline in earnings, the commitment to a structured dividend payout demonstrates a focus on enhancing long-term value for investors. As the company continues to address financial challenges and invest in future projects, its ability to manage dividend distributions effectively will be key to sustaining investor confidence and achieving future success.