The auditor of Boulevard Holdings Inc. (BHI) has raised a red flag on the Boracay and Puerto Galera resort operator’s ability to continue as a going concern after racking up massive losses over the last 10 years.
In its annual report for fiscal year ending May 2021 which was released only yesterday, Alas Oplas & Co. (AOC) cited BHI’s worsening negative cash flow (up 505 percent year on year to P53.71 million) and accumulated deficit (up 30 percent year on year to P146 million) for declaring a “material uncertainty” in the resort operator’s business.
Based on Bilyonaryo.com’s research, BHI has burned a total of P423 million after consistently losing from 2012 to February 2022. Only P200 million of these losses were incurred during the pandemic years which started March 2020.
Despite its heavy losses, BHI noted that it has remained in operation through the financial assistance of businessman Jose Marcel “Jocel” Panlilio and it has not been in debt from any banks.
Panlilio, who owns 40 percent of the company, agreed to infuse an additional P150 million to BHI.
BHI is expected to spend P9 million from Panlilio’s fresh ayuda for the reopening of Friday’s Boracay Beach Resort by the second quarter of 2022.
BHI also expected its Friday’s Puerto Galera to be fully operational by June 2022 after on and off operations since May 2021. Both Boracay and Galera resorts were shut down during the breakout of COVID in March 2020.
BHI expects to open its expanded room capacity by the last quarter of 2022. It is also ramping up its marketing and promotional activities focusing “on its upper niche market of Westerners and well-to-do Asian travelers.” BHI remains keen on investing in properties in other locations to be developed into new Friday’s Resorts.
Amid the optimism, BHI still felt it was “appropriate” to prepare separate financial statements on a going- concern basis.
“Should the parent company be unable to continue as a going concern, adjustments would have to be made to the separate financial statements to adjust the value of the parent company’s assets to their recoverable amounts and to provide for further liabilities which might arise and reclassify non-current assets as current assets,” BHI said.
Trading on shares of BHI resumed on May 5 or seven months after the Philippine Stock Exchange’s suspension order in October 2021.
BHI, which submitted its FY 2021 annual report and three quarterly reports for FY 2022 on May 4, jumped 20 percent to 7.6 centavos on P31 million turnover on its first day of trading since its suspension.