Financial Adviser: 5 Things to Know About Enrique Razon’s Bloomberry Resorts After Its 2025 Financial Results and How to Profit from It

Over the past year, shares of Bloomberry Resorts Corporation (PSE: BLOOM) have drawn increasing attention from investors in the Philippine stock market. Once regarded as one of the country’s flagship gaming operators, the stock fell sharply and now sits near multi-year lows after a difficult operating period for both the company and the broader casino industry.

Over the past 12 months, Bloomberry’s share price declined significantly from levels above P6 to the P2 range, which reflects investor concerns about weaker earnings, higher operating costs, and uncertainty surrounding the gaming sector.

Several developments contributed to the market’s cautious view. The company reported weaker profitability as it absorbed the costs associated with expanding its operations.

At the same time, changes in the Philippine gaming landscape, including the government’s decision to phase out Philippine Offshore Gaming Operators (POGOs) and tighter oversight of certain gaming activities, introduced additional uncertainty for investors.

The gaming industry itself is inherently cyclical. Casino revenues tend to move with tourism flows, consumer spending, and international travel trends. When visitor arrivals slow or economic sentiment weakens, gaming volumes can quickly follow. Over the past few years, these factors have contributed to a more cautious outlook for gaming operators across Asia.

Meanwhile, several broader trends could gradually improve the environment for established gaming operators. The Philippine tourism sector has begun to recover as international travel normalizes, although visitor arrivals remain below pre-2019 levels and growth has slowed in recent months.

Even so, the number of foreign visitors has risen significantly from pandemic lows, and policymakers continue to target further expansion of the tourism sector in the coming years. If international travel continues to strengthen, integrated resort destinations such as Entertainment City could benefit as foreign visitors return and tourism-related spending improves.

Against this backdrop, BLOOM’s position in the market becomes particularly interesting. The company now operates two large integrated resort properties in Metro Manila while it continues to explore new growth initiatives in digital gaming and tourism-related ventures.

Before making any investment decision, however, it is always important to look beyond short-term market sentiment and carefully examine the fundamentals of the business. In the case of BLOOM, several underlying factors may determine whether the company’s current valuation truly reflects its long-term potential.

Here are five important things investors should examine before deciding whether you invest in the company:

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BLOOM’s weaker earnings in 2025 have unsettled many investors and contributed to the sharp decline in its stock price. Yet a closer examination of its financial statements suggests that the drop in profitability may be linked to the company’s expansion cycle rather than a deterioration in the fundamentals of the business.

The company’s revenue performance, for instance, tells a more complete story than the headline earnings figures might suggest.

In 2025, BLOOM generated P52.29 billion in total revenues, slightly lower by 0.9 percent from the P52.76 billion recorded in 2024. The relatively small decline in 2025 indicates that demand for the company’s gaming and hospitality offerings remained broadly stable despite a challenging operating environment.

A closer breakdown of revenues, however, reveals a shift in the composition of the business. Gaming continued to account for the majority of BLOOM’s income. In 2025, gaming revenues reached P39.64 billion, which accounted for about 75.8 percent of total revenues. However, this was 6.5 percent lower than the P42.41 billion recorded in 2024.

In contrast, BLOOM’s non-gaming businesses expanded significantly. Hotel, food and beverage revenues increased to P7.30 billion, up 33.9 percent from P5.45 billion in 2024. Meanwhile, retail and other revenues rose by 9.4 percent to P5.35 billion from P4.90 billion the previous year.

Combined, non-gaming revenues reached P12.65 billion in 2025, which accounted for approximately 24 percent of total revenues, compared with about 20 percent in 2024.

Much of this growth came from Solaire Resort North, the company’s second integrated resort in Metro Manila, which opened in May 2024. The property began contributing more meaningfully to hotel, dining, and retail revenues during its first full year of operations.

While revenues remained relatively stable, the more dramatic change occurred on the cost side. Operating costs and expenses rose sharply to P49.82 billion in 2025, compared with P42.47 billion in 2024, an increase of 17 percent. As a result, operating income fell by 76 percent from P10.29 billion in 2024 to only P2.47 billion in 2025.

The decline in operating income was further amplified at the bottom line by the company’s financing costs. After accounting for interest expenses and other non-operating items, the company reported a net loss of P2.65 billion, a sharp reversal from the P2.58 billion net profit recorded in 2024.

This shift from profit to loss may appear alarming, but it largely reflects the timing of costs associated with major capital investments. The financing expenses linked to Solaire Resort North have already been incurred, while the full earnings contribution of the new property will take time to materialize.

At the same time, operating expenses increased as the resort completed its first full year of operations. BLOOM incurred higher staffing, utilities, and other operating costs as the new property ramped up activity. The company also invested heavily in marketing and promotions to support the launch of MegaFUNalo, its digital gaming platform.

Such cost pressures are common during the early stages of large integrated resort developments. Newly opened resorts typically require several years before reaching optimal operating efficiency as customer traffic builds, marketing programs take effect, and operations stabilize.

As Solaire Resort North continues to mature and operating efficiencies improve, the same assets that currently weigh on earnings could begin contributing more meaningfully to the company’s profitability.

If operating expenses begin to normalize while revenues continue to expand modestly, BLOOM’s profitability could recover gradually. Assuming revenues increase to about P58 billion in 2026, BLOOM could begin to see the early financial benefits of operating two integrated resorts. This projection represents roughly 11 percent growth from the P52.29 billion recorded in 2025, which is reasonable when viewed against the company’s current revenue mix and the gradual ramp-up of its newest property.

The assumption rests on three factors. First, Solaire Resort North is still in its early operating stage. Large integrated resorts typically require two to three years to build customer traffic and reach stable operating levels. Even a modest increase in gaming volumes and hotel occupancy at the new property could add roughly P3 billion in incremental revenues as marketing programs mature and repeat customers begin to emerge.

Second, BLOOM’s mass-market gaming segment, which includes table games and electronic gaming machines, showed resilience in 2025 despite weakness in VIP gaming. If mass-market gaming grows by around five percent, supported by improving tourism activity and domestic spending, this segment could contribute an additional P2 billion in revenues.

Third, non-gaming revenues, particularly hotel, food and beverage, and retail operations, expanded significantly in 2025 as the new resort began attracting visitors. Even if growth moderates from last year’s pace, a 10 percent increase in non-gaming revenues could contribute roughly P1 billion more to the company’s top line.

Taken together, these assumptions could reasonably lift BLOOM’s revenues to approximately P58 billion in 2026. If operating costs grow at a slower pace as expansion-related expenses stabilize, the company could generate roughly P14 billion in EBITDA and return to around P3.5 billion in net income this year.

While BLOOM reported a net loss in 2025, the company’s financial position suggests that its balance sheet remains relatively stable and capable of supporting its expansion strategy.

One way to evaluate this is by examining the company’s liquidity position. At the end of 2025, BLOOM reported P30.73 billion in total current assets, compared with P16.39 billion in current liabilities. This translates to a current ratio of about 1.87, meaning the company held nearly P1.87 in short-term assets for every P1 of short-term obligations.

A closer look at the composition of current assets further highlights the company’s liquidity. Cash and cash equivalents amounted to P26.5 billion, representing about 86 percent of total current assets. Although this was lower than the P33.18 billion recorded in 2024, the company still retains a substantial cash reserve that provides flexibility for operations and debt servicing.

BLOOM’s leverage position remained largely stable despite the recent earnings decline. Its debt-to-equity ratio declined slightly to 2.21 in 2025, compared with 2.23 in 2024. Although this level of leverage may appear elevated, it is not unusual for integrated resort operators, where large-scale developments require significant upfront capital investment and are typically financed with long-term debt.

Perhaps more importantly, BLOOM’s financials show that the company continues to generate positive operating cash flows, even during a year when it reported a net loss.

In 2025, Bloomberry generated P8.14 billion in net cash provided by operating activities after interest receipts and tax payments. While this was lower than the P16.41 billion recorded in 2024, it nevertheless indicates that the company’s core operations continue to produce cash.

For investors, the key takeaway is that BLOOM’s recent losses do not necessarily indicate financial distress. The company continues to generate operating cash flows and maintains sufficient liquidity to support its operations and debt obligations while its newest resort continues to ramp up operations.

Another way to evaluate BLOOM’s business is to examine the returns it generates on the capital invested in its assets. One commonly used measure is return on invested capital (ROIC), which compares a company’s operating profits with the capital required to generate those profits.

BLOOM currently has about P164.9 billion in invested capital, which consists primarily of P105.4 billion in long-term debt and about P59.5 billion in shareholders’ equity.

In 2025, the company generated about P2.47 billion in operating profit (EBIT). After applying the corporate tax rate of roughly 25 percent, net operating profit after tax (NOPAT) amounts to approximately P1.85 billion.

When this profit is compared with the company’s invested capital, Bloomberry’s return on invested capital (ROIC) comes out to roughly 1.1 percent, which means that the company generated slightly more than P1 only of operating profit for every P100 invested in the business.

At first glance, this level of return appears extremely low and may suggest that the company’s assets are generating weak economic returns. However, such a conclusion can be misleading if the company is evaluated during a major expansion cycle.

The key reason for the currently depressed ROIC is that BLOOM has already invested heavily in new assets, particularly Solaire Resort North, while the earnings contribution from those investments is still developing. In other words, the capital base has already expanded significantly, but the new resort has not yet reached its mature operating levels.

To understand the underlying economics of the business, it will be helpful to look at the performance of Solaire Resort Entertainment City, BLOOM’s original integrated resort in Manila.

The original Solaire property required an estimated investment of roughly $1.2 billion, equivalent to around P65 billion in capital. At its peak in 2023, before the launch of Solaire North and the additional marketing expenses associated with new initiatives, the property generated approximately P19.7 billion in EBITDA.

After deducting estimated depreciation of about P7 billion, operating profit would be roughly P12.7 billion. Applying a 25 percent tax rate results in an estimated NOPAT of about P9.5 billion. When compared with the estimated P65 billion invested in the original resort, the ROIC is approximately 14.6 percent.

This level of return is actually quite strong for an integrated resort business. Many casino operators in major markets such as Macau and Las Vegas typically generate ROIC in the 10 to 15 percent range, which place Solaire Entertainment City near the upper end of industry returns during its mature years.

Solaire Resort North generated about P3.8 billion in EBITDA in 2025, its first full year of operations. Integrated resorts typically require several years to reach stable operating levels as customer traffic builds and marketing programs mature.

If the property eventually achieves EBITDA of around P6 billion, which is equivalent to roughly one-third of the peak earnings generated by the original Solaire resort, the return on the incremental capital invested in the project could approach 6 percent.

Viewed in this context, the company’s current ROIC should be interpreted with caution. The performance of the original Solaire resort has already shown that BLOOM’s integrated resort model can generate attractive returns once a property reaches maturity.

As Solaire Resort North gradually builds traffic and stabilizes its operations, the overall returns of the business could begin moving closer to those historical levels.

When a company is in the middle of a major expansion cycle, its reported earnings may not fully reflect its long-term earning capacity. This is particularly true in industries such as airlines, hotels, cruise lines, and casinos, where large capital investments can temporarily depress profits before new assets reach stable operating levels.

In BLOOM’s case, recent earnings reflect a transitional phase in the company’s development. To estimate normalized earnings, it is useful to consider the potential performance of the company’s two integrated resorts once both properties reach stable operating levels.

Industry experience suggests that mature integrated resorts typically earn about 10 percent return on invested capital. This benchmark reflects the economics observed in established casino markets such as Macau, Las Vegas, and Singapore, where large-scale resorts require substantial upfront investment but are capable of producing stable cash flows once operations mature.

BLOOM’s flagship Solaire Resort Entertainment City required an estimated investment of about P65 billion when it was developed. The company later expanded its footprint with Solaire Resort North, which involved approximately P55 billion in development costs. Together, these two properties represent roughly P120 billion of capital invested in Bloomberry’s integrated resort portfolio.

If these assets eventually generate a normalized return of 10 percent on invested capital, the two resorts could produce approximately P12 billion in after-tax operating profit once both properties reach stable operating levels.

Because integrated resorts record substantial depreciation due to their large physical assets, operating profits tend to understate the cash-generating ability of the business. After accounting for these non-cash charges, an after-tax operating profit of around P12 billion would correspond to roughly P21 billion in EBITDA.

If BLOOM’s resorts eventually generate around P21 billion in EBITDA, the next question is how the market typically values such earnings.

Casino operators are commonly valued using the enterprise value to EBITDA (EV/EBITDA) multiple, which compares the total value of the business with its operating cash earnings. In established gaming markets, integrated resort operators often trade at EV/EBITDA multiples of about 8 times during normal market conditions.

Applying this benchmark to BLOOM’s normalized EBITDA provides a useful reference point for valuation. If the company were valued at 8 times EBITDA, an EBITDA level of P21 billion would imply an enterprise value of approximately P168 billion.

To estimate the value attributable to shareholders, net debt must be deducted from this enterprise value. BLOOM currently carries about P77 billion in net debt. After subtracting this amount, the implied equity value of the company would be approximately P91 billion.

Dividing this figure by the company’s 11.49 billion shares outstanding results in an estimated value of roughly P7.90 per share.

Another way to evaluate a gaming company is to examine how the market values its casino capacity, rather than relying solely on short-term earnings. One metric commonly used by gaming analysts is enterprise value per gaming table, which compares the total value of a casino operator with the size of its gaming floor.

This approach is particularly useful for companies going through a recovery phase. Traditional valuation measures such as earnings or price-to-earnings ratios can appear distorted when profits are temporarily depressed due to expansion costs or the opening of new properties. By contrast, EV per gaming table focuses on the physical capacity of the casino business, which ultimately determines its long-term revenue potential.

To estimate this metric, we use BLOOM’s enterprise value (EV) which we computed earlier at around P107 billion. BLOOM currently operates two integrated resort properties. The original Solaire Resort Entertainment City property has about 295 gaming tables, while Solaire Resort North is estimated to have roughly 270 tables across its gaming floors. Together, these two properties give BLOOM an estimated 565 gaming tables in operation.

By dividing BLOOM’s P107 billion is divided by its total gaming capacity, it is effectively valued at about P189 million per gaming table, which is equivalent to roughly US$3.4 million per table.

This figure becomes more meaningful when compared with valuations in other gaming markets. Casinos in Macau often trade at enterprise values of around $7 million to $12 million per gaming table, while properties on the Las Vegas Strip can reach $10 million to $20 million per table. Even regional Asian casino markets typically fall in the range of $5 million to $8 million per table.

Against these benchmarks, BLOOM’s valuation of about $3.4 million per table suggests that the company is trading at a substantial discount to many comparable casino operators.

If BLOOM were valued at even US$6 million per gaming table, which would still be below many regional casino valuations, the implied enterprise value would rise to roughly P190 billion. After subtracting net debt, this would translate to an equity value of about P113 billion, equivalent to approximately P9.80 per share.

The long-term price movement suggests that BLOOM may have already completed a large five-wave bearish cycle from its peak near P12 in 2023. The first wave likely carried the stock down to roughly P7.5, followed by a corrective rebound toward about P11.5 that formed Wave 2. The third wave then unfolded as the strongest leg of the decline, driving the price sharply toward the P3 region. A countertrend rally to around P6 appears to have been Wave 4, after which the market entered the final decline, Wave 5, which brings the price back toward the current P2.50 range.

In Wave theory, the completion of five waves in the direction of the dominant trend usually signals that the primary decline is nearing exhaustion and that the market may begin transitioning into a corrective phase.

If the five-wave decline has indeed completed, the next stage would typically be an A-B-C corrective advance. In such a scenario, the current consolidation around P2.50 could represent the base for the beginning of Wave A upward. The first resistance area lies near P2.80 to P3.20, which corresponds to previous congestion zones.

If momentum improves and a full corrective structure develops, the next targets would likely be around P4.50. From a broader wave perspective, strong corrective rallies after a long decline often retrace roughly one-third of the preceding drop, which would imply longer-term recovery potential toward the P5 range.

Price geometry price analysis supports the current support zone. The decline from roughly P12 to P2.50 creates several key retracement levels that can act as resistance during any rebound.

The first important resistance level appears near P3.20, followed by P4.90, which represents roughly a quarter retracement of the entire decline. If a stronger recovery eventually develops, higher resistance levels may emerge near P5.80 and P7.20. These would represent deeper retracement levels and would likely require a sustained improvement in the company’s earnings outlook.

On the downside, the most important technical level remains the support band between P2.40 and P2.50, where the stock has repeatedly stabilized. As long as the price remains above this zone, the long-term basing scenario remains intact. However, if this support fails decisively, the next support levels could appear near P2.20, followed by P2.00, which would represent a deeper extension of the fifth wave of the decline. Such a move would imply that the bearish cycle has not fully completed and that the market is still searching for a final capitulation low.

Henry Ong, RFP, is an entrepreneur, financial planning advocate and business advisor. Email Henry for business advice [email protected] or follow him on Twitter @henryong888