Belle Corporation, a Philippine conglomerate, announced last Friday that its third-quarter profits had fallen by 22.9 percent from the same period in 2018. That saw the company’s profits drop from PHP589.3 million to PHP454.3 million ($8.9 million) for the third quarter of this year in the same quarter from last year.
However, Belle Corp estimates that total sales for this year’s first nine months have fallen by 11 percent from that of 2018’s first nine months. The company’s total revenue for the first nine months was Php5.77 billion ($113 million), ending on September 30. Total net profit decreased to PHP2.18 billion by 18 percent.
In the downturn, many factors played a role, but none so much as lotery sales. The Pacific Online Systems unit saw a 50% decline in sales, according to the report. This unit rents equipment to the Philippines Charity Sweepstake Office (PCSO), but from small-town lotteries they face strong competition. That’s why in such a short period of time there has been such a rapid decline in total revenue.
Belle noted that City of Dreams’ game sales remained unchanged, hitting PHP2.37 billion for this year’s first nine months. In reality, City of Dreams was a source of good news for the group, with building lease revenue rising 16 percent, reporting at PHP2.0 billion through this year’s first three quarters.
“Although Belle continued to experience growth at City of Dreams Manila, its overall operating performance was affected by weaker results at Pacific Online Systems Corp., which leases online betting equipment to the Philippine Charity Sweepstakes Office (PCSO) for their lottery and keno operations,” the company explained in a filing with the regulatory agency.
Belle’s real estate activities have also faced declining revenue. They fell 4 percent to a total of Php2.52 billion (US$ 49 million) over the first nine months of this year. Php2.0 billion of this comes from leasing land and buildings that are part of the properties of City of Dreams Manila and Melco Resorts and Entertainment.
A piece of good news came when it was revealed that they had lifted a suspension of their lottery activities. The ban came and referred to widespread corruption in the lotteries, but Belle explained in the filing that: “With the suspensions since lifted, Pacific Online is working closely with the PCSO and its network of agents to boost the attractiveness of the pari-mutuel games it offers and is working to implement cost efficiency measures across its operations.”