The Chairman and CEO of Manila’s Bloomberry Resorts Corp, Enrique Razon Jr, has described 2020 as a write-off but says the company has no concerns about running low on cash.
Bloomberry, which owns and operates Philippines market leader Solaire Resort & Casino in Entertainment City, has been forced to shut down the majority of its casino and resort facilities following a PAGCOR directive ordering all gaming operations in Luzon to close from 15 March to 12 April. The closure has since been extended to 30 April.
In an interview with Bloomberg TV this week, Razon said he has low expectations for the remainder of 2020 but insisted Bloomberry was well placed to ride out the COVID-19 pandemic.
“Of course when you are closed there is no cash flow really, although we have long term guests in the hotel who are staying put here, but the cash in the group is pretty healthy. Of course this year, you can write it off, but there really are no concerns there.”
Asked when he expected casino customers to return once President Rodrigo Duterte’s community quarantine measures are eventually lifted, Razon replied, “I think people are profoundly impacted by the virus and the lockdowns, having to focus just on buying food, spending their money. The government has to give people cash.
“I think people will come out of this and the savings rate is going to dramatically increase, so I don’t think consumer spending is going to recover that quickly.”
While Razon’s casino business – which saw consolidated net profit grow 38% to Php9.9 billion (US$196 million) in 2019 – has stalled, he has been kept busy with the Philippine port business in which he made his fortune. The Chairman and CEO of International Container Terminal Services Inc (ICTSI) said the shipping giant has been working around the clock to accelerate the delivery of food and medical equipment to key locations around the country after the number of shipping containers arriving at its Manila port fell from around 4,000 per day to less than 50.
“We’ve got that back up now to 1,000 to 2,000, so there is some improvement,” he said. “We are making a little bit of headway on a daily basis and pushing very hard. Trucks and goods are able to move a lot freer and we’ve been pushing importers to open their warehouses to take deliveries, especially for the goods that are required to feed the people – foodstuffs especially, medical equipment, medicines … we’re pushing very hard and we’re imposing very high penalties for containers that are left in the port.
“The people need to be fed, they need to be given medicine and the government needs all the shipments that have been coming in.”
While both Bloomberry and ICTSI are expected to suffer substantial declines in revenue through 2020, Razon noted that corporate profits could not be allowed to become a primary focus.
“The whole thing is unprecedented so we’re not even calculating that,” he said. “I think more important are the concerns of the people, feeding the people. The concerns of the business community are secondary at this point.
“The main thing is just to keep the economy flowing, goods flowing, get the infection rate down and we’ll see about lifting the lockdown.
“Lifting lockdowns in this environment is going to be very tricky. There has to be a plan, it’s not just one day to the next, so I think a lot of people are under-estimating what this is going to take.”