Financial Highlights: 1

*EV – Enterprise Value

**Latest price as of 06/14/2017 is 0.82

Waterfront Philippines Inc. (WPI) is 46%-owned by The Wellex Group, Inc. (TWGI), registered with the Philippine Securities and Exchange Commission (SEC) on September 23, 1994 as an investment holding company that participates in hotel, leisure, and tourism businesses. WPI generates its revenue mainly through hotel room rentals and lease agreements with PAGCOR and different concessionaires on its casino-hotels.

Below shows the revenue mix of WPI: 2

The total revenue of WPI and its Subsidiaries is composed largely of rental income from the leased areas of the subsidiaries.

The largest component of “Rent and related income” is the lease agreements of WPI generated from Waterfront Cebu City Casino Hotel, Incorporated (WCCCHI) and Waterfront Mactan Casino Hotel, Incorporated (WMCHI), and of ACESITE (Phils.) Hotel Corporation (APHC) with Philippine Amusement and Gaming Corporation (PAGCOR) which also represents 33.74% of the total revenue.

The aforementioned lease agreements with PAGCOR has expired last August 2, 2016 and December 31, 2016, respectively. WPI and APHC is still negotiating with PAGCOR for the renewal of the leases. Currently, PAGCOR pays rent to WCCCHI, WMCHI, and APHC on a month-to-month basis. 3

Rental from hotel rooms of different subsidiaries as represented by Rooms revenue, is up by 9.17% following major hotel facility renovations of different subsidiaries in the past years and the annual developmental projects of WPI. 4

WPI has the following corporate structure: 5

Significant investments of WPI includes Waterfront Cebu City Casino Hotel, Inc. (WCCCHI) in Cebu City, Waterfront Mactan Casino Hotel, Inc. (WMCHl) in Mactan, Cebu, Davao Insular Hotel Company, Inc. (DIHCI) in Davao City, and ACESITE (Phils.) Hotel Corporation (APHC).

Last January 2017, WPI laid out its 10-year masterplan to turn DIHCI, occupying an area of about 12 hectares in Davao City, into a mixed-use leisure complex that aims to use the vacant spaces on the seaside property for additional amenities. 6

MBI in partnership with PAGCOR aggressively taps into slot machine segment potentials in the gaming market. In 2015, it opened a 1,200 square meter VIP arcade housing 240 slot machines in Sta. Cruz, Manila. 7

The top 5 Shareholders of WPI are as follows: 8

The following are Directors and Executive Officers of WPI:9

Renato B. Magadia is the Chairman of the Board of Metro Alliance Holdings and Equities Corporation, Waterfront Philippines, Inc. and Mercator Securities Corporation. He currently holds the following positions in different companies:

  • Director of Howden Insurance and Reinsurance Brokers (Phils.), Inc., All Ocean Maritime Agency, Inc., Cunningham Toplis Philippines, Inc., The Zuellig Group, Misons Industrial & Dev’t Corp., Phil. Accident Managers, Inc. and Philippine. Estates Corp.
  • President of The Zuellig Corporation

Kenneth T. Gatchalian is also a member of the Board of Forum Pacific, Inc. and Wellex Industries, Inc., and The Wellex Group, Inc., and holds the following positions in different companies:

  • President, Chief Executive Officer and Director at Acesite (Philippines) Hotel Corp.
  • President, CEO & Executive Director at Wellex Industries, Inc.
  • Previously employed as Treasurer and Director by Metro Alliance Holdings & Equities Corp. and Chief Operating Officer & Executive Vice President by Philippine Estates Corp.

Arthur M. Lopez is the Principal Consultant of AML Hotel Consultancy, an independent Hotel Consultant and the President of the Philippine Hotel Federation Inc. He currently holds the following positions in different companies:

  • Hotel Management Consultant of various hotels in Ortigas, Makati, and Manila
  • Hotel Advisor of Cathay International Resources Corp., Hotel Technical Services Adviser and Management Consultant of Hotel of Asia Inc.
  • Owner’s Representative and Advisor in certain resorts in Malaysia, and has done hotel and club consultancy work in Japan, Palau, China and Indonesia.
  • Chairman of Acesite Philippines Hotel Corporation, since 2004-present.
  • On 2014, he received Rotary Club of Manila 10th Tourism Awards in Hotel Tourism Category.

Lamberto B. Mercado, Jr., a lawyer and a CPA by profession, is a member of the Board of Directors of several publicly-listed companies namely: Waterfront Philippines, Inc., Metro Alliance Holdings & Equities Corp., Forum Pacific, Inc., Acesite (Philippines) Hotel Corporation and Wellex Industries, Inc.

  • He is currently the Vice-President for Legal Affairs of the Wellex Group, Inc.
  • As Deputy Administrator for Administration in the past, he helped in the drafting of Administrative Orders to effectively implement R.A. 7227 (the law creating the Subic Bay Freeport Zone) and its implementing rules and regulations.

As a Corporate Planning Director, Maria Socorro Cotelo had significant training in Hotel Management and Distribution Systems and attended Revenue Management seminars specifically on Pricing, Travel distribution and technology, Project Management, Branding, and Selling Skills workshops.

  • She completed her Certification in Revenue Management at Cornell University, New York in 2011 with focus on hotel and restaurant revenue management, strategic pricing, demand management, strategic marketing and financial management.

Family Relationships among the officers listed: 10

 

Sources:

  1. WPI Audited Financial Statements (AFS) 2016, 2015
  2. WPI Audited Financial Statements (AFS) 2016 page 53, https://goo.gl/qyDXTu
  3. WPI Audited Financial Statements (AFS) 2016 page 33, https://goo.gl/qyDXTu
  4. WPI Annual Report 2015 page 32, https://goo.gl/3VdWC7
  5. WPI Audited Financial Statements (AFS) 2016 page 120, https://goo.gl/qyDXTu
  6. Waterfront plans to turn Davao hotel into mixed use development, https://goo.gl/nEr98Y
  7. WPI Annual Report 2015 page 28, https://goo.gl/3VdWC7
  8. WPI Audited Financial Statements (AFS) 2016 page 24, https://goo.gl/qyDXTu
  9. WPI Audited Financial Statements (AFS) 2016 page 31, https://goo.gl/qyDXTu
  10. WPI Audited Financial Statements (AFS) 2016 page 37, https://goo.gl/qyDXTu

 

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