BEL’s (Belle Corporation) 9M20 result suggests PLC’s 15% dividend yield may no longer be true
Belle Corporation (BEL) is a developer of tourism and leisure destinations in the Philippines. Its principal asset is the City of Dreams Manila in PAGCOR Entertainment City by Manila Bay, which is being leased on a long-term basis to Melco. BEL also owns approximately one hectare of presently undeveloped land across from the City of Dreams Manila site.
In addition to lease income, BEL is accorded a share in revenues or earnings from City of Dreams Manila’s gaming operations through the operating agreement between its 78.7%-owned subsidiary Premium Leisure Corp. (PLC) and Melco.
According to BEL its primary growth driver is its share in the gaming revenues at the City of Dreams Manila through its 78.7% owned subsidiary PLC. The revenue of PLC from its share in the gaming revenues at the City of Dreams Manila for 9M20 stood at only 325 Million Pesos, a decline of 86% from the 2.38 Billion Pesos of revenue from the first nine months of 2019. Gaming operations at the City of Dreams Manila were either suspended or substantially limited from mid-March through September 2020 in compliance with government initiatives to contain the virus.
The cash flows from the 325 Million-Peso revenue of PLC is just enough for its day to day operations. This year PLC distributed cash dividends of 1.5 Billion Pesos to its shareholders. That level of cash dividend distribution is highly doubtful for next year as PLC’s revenue this year dried due to the pandemic. Although PLC may still have that cash of 2.1 Billion Pesos that it had at the end of 1H20, it is doubtful that PLC may distribute most of it to dividends next year. The indicative dividend yield of 15% of PLC may no longer be true as it might not be able to distribute cash dividends at the same level as this year.
On October 22, 2020 PLC closed at 0.345 up 2.99% with a volume of 26,980,000. PLC’s 65-day average volume is at 10,899,231.

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