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Bloomberry’s Costs Surge Faster Than Revenues, Squeezing Operating Cash in 9M 2025


Bloomberry Resorts Corporation (PSE: BLOOM) reported that operating costs grew far faster than revenues in the first nine months of 2025, compressing margins and tightening operating cash coverage of interest, according to its latest SEC Form 17‑Q. The company posted modest top‑line growth but a steep drop in EBITDA and cash from operations, reflecting heavier expense run‑rates from Solaire Resort North’s ramp‑up and the launch of its new broad‑mass digital gaming platform, MegaFUNalo!

Revenue up slightly, costs up sharply

Net revenues rose 3.1% year‑on‑year to ₱39.70 billion in 9M 2025. However, operating costs and expenses jumped 21.7% to ₱36.48 billion, pushing the cost‑to‑revenue ratio to 91.9% from 77.8% a year earlier. That margin squeeze contributed to a 29.9% decline in reported EBITDA to ₱8.84 billion, with EBITDA margin sliding to 22.3% from 32.7%. 

Management attributed the higher cost base primarily to Solaire Resort North’s ramp‑up and MegaFUNalo! operating expenses, with the latter accounting for ₱1.2 billion in the first nine months and ₱685.4 million in the third quarter alone. In addition, PAGCOR license fees booked under operating costs reached ₱8.5 billion (vs ₱8.1 billion in 9M 2024), and depreciation and amortization increased 38.3% to ₱5.61 billion as new assets came online. 

Gaming mix weak at Entertainment City; North ramps but not yet scale‑neutral

On the gaming side, consolidated net gaming revenues fell 3.1% to ₱30.19 billion. The key drag was Solaire Resort Entertainment City’s VIP segment, where VIP revenue plunged 49.7% on lower rolling‑chip volume and a weaker VIP hold of 2.61% (vs 3.47% last year and a 2.85% normalized benchmark). Mass and slots at Entertainment City also softened (mass −5.1%, slots −14.4%). 

Conversely, Solaire Resort North delivered strong growth: VIP revenue +712% (helped by a 4.53% hold), mass +180%, and slots +158% over the comparable period since opening in May 2024. Even so, North’s absolute scale and ramp timing did not fully offset Entertainment City’s slowdown and the higher group cost run‑rate. Non‑gaming revenues provided support—Hotel/F&B +39.9%, Retail +22.9%—while interest income fell 38.1% on lower temporary cash investment balances. 

Operating cash compression: interest coverage down, post‑interest FCF negative

Cash generation tightened markedly. Net cash from operating activities (CFO) declined 43.4% to ₱7.94 billion, reflecting weaker EBITDA and adverse working‑capital movements—most notably a ₱2.05 billion outflow from payables and other current liabilities, versus a ₱0.91 billion inflow last year. The company also recorded a ₱2.95 billion non‑cash adjustment in CFO relating to “Others,” tied to the gain on loan modification that was recognized above the operating line. 

Cash interest payments rose to ₱5.72 billion, reducing cash interest coverage (CFO/interest) to roughly 1.39× (from 2.69× in 9M 2024). With capex at ₱3.15 billion and dividends totaling ₱892.5 million, free cash flow after interest and dividends was negative ~₱1.83 billion for the period. 

Debt profile and facilities

Bloomberry continues to operate under two syndicated loan facilities. The company refinanced its prior ₱73.5 billion facility with a new ₱72.0 billion, 10‑year floating‑rate facility in October 2024, and it amended its ₱40.0 billion facility in February 2025, recognizing a loan discount that produced a ₱2.9 billion gain on modification in 9M 2025. As of September 30, 2025, long‑term debt net of discounts stood at ₱105.76 billion (current portion ₱2.18 billion), with Debt Service Reserve Accounts (DSRA) maintained per covenant requirements. Management disclosed compliance with financial covenants. 

Quarterly color: Q3 2025 loss, cost intensity elevated

In the third quarter, Bloomberry reported a consolidated net loss of ₱1.75 billion, wider than ₱470 million in Q3 2024, as net revenues fell 8.0% to ₱12.66 billion and operating costs increased 8.1% to ₱12.62 billion. Q3 EBITDA was ₱1.92 billion (−52.6% YoY), with a 15.2% margin; management noted MegaFUNalo! operating expenses of ₱685.4 million in the quarter. Interest expense eased year‑on‑year in Q3 on lower average rates post‑refinancing, but remained substantial at ₱2.03 billion. 

Balance sheet and equity movements

Total assets decreased 3.4% to ₱193.0 billion as current assets fell (cash and receivables) and property and equipment depreciated. Cash and cash equivalents ended the period at ₱28.97 billion (−₱4.21 billion year‑to‑date), after funding interest, debt principal repayments, capex, and the ₱892.5 million cash dividend distributed on April 3, 2025. Total liabilities were ₱131.35 billion (−4.7%), while equity was ₱61.74 billion (−0.4%), reflecting the dividend and low net income. Net debt‑to‑equity was 1.66×. 

Management’s commentary and operational themes

The filing’s MD&A highlights three themes:

  1. Ramping assets & platforms carry front‑loaded costs. Solaire North’s operating ramp and MegaFUNalo! are the principal cost drivers in 2025; the company is still building scale and customer cohorts to leverage these cost bases. 
  2. VIP volatility materially impacts profitability. Entertainment City’s VIP hold underperformed year‑over‑year (2.61% vs 3.47%), magnifying revenue and EBITDA sensitivity; hold‑normalized EBITDA for 9M 2025 would be ₱9.02 billion, still below last year.
  3. Debt service remains a central KPI. With floating‑rate exposure on large syndicated facilities, the company emphasizes DSRA maintenance, covenant compliance, and refinancing actions; despite refinancing gains, cash interest now consumes a larger share of CFO.

Outlook: what to watch

Analytically, the next quarters hinge on VIP recovery at Entertainment City (volumes and hold), mass and slots momentum, and unit economics for MegaFUNalo! (acquisition costs, retention, contribution margin). For liquidity, watch working‑capital discipline (payables and receivables) and cash interest coverage under the ₱72.0B and ₱40.0B facilities as rates evolve. Bloomberry also continues property development planning at Paniman, Cavite, though the timeline is “yet to be finalized,” implying no immediate capex step‑ups from that front.

Bottom Line

Bloomberry’s 9M 2025 print shows a cost‑heavy operating posture amid mixed gaming trends. Revenues grew slightly, but costs—linked to new operations and platforms—grew much faster, compressing margins and squeezing operating cash, which now only modestly covers cash interest and turns negative after capex and dividends. Sustained improvement will likely require a rebound in Entertainment City’s VIP and mass/slots throughput, scale benefits at Solaire North, and tighter cost control, if Bloomberry is to re‑expand CFO and regain comfort on debt service and investment funding. 

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