GGRAsia – Genting Singapore 4Q profit falls 30 pct

Genting Singapore 4Q profit falls 30 pct

Feb 24, 2015 Newsdesk Latest News, Singapore, Top of the deck

Genting Singapore Plc, the operator of Resorts World Sentosa casino resort (pictured), reported net profit of SGD118.9 million (US$87.3 million) for the final quarter of 2014, down by 30 percent from the prior-year period. Revenue for the period fell 8 percent year-on-year to SGD637.9 million, the company said in a filing to the Singapore Exchange.

For the three months to December 31, Genting Singapore reported adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of SGD190.2 million, a 24-percent drop from a year ago.

Resorts World Sentosa contributed with adjusted EBITDA of SGD194.6 million in the quarter, but that result was affected by luck in VIP play, the company said on Tuesday.

“On a theoretical normalised hold basis, Resorts World Sentosa would have generated an adjusted EBITDA of approximately SGD280 million,” said Genting Singapore, a subsidiary of Malaysian conglomerate Genting Bhd.

It added: “The mass and premium mass segments of our gaming business displayed respectable growth. On the other hand, the premium player market segment was impacted by significant below average win percentage and rolling volume.”

Genting Singapore’s latest quarterly numbers included a SGD82 million impairment loss on trade receivables, up by 42 percent from a year earlier.

For the full-year 2014, the casino operator reported revenue of SGD2.9 billion and adjusted EBITDA of SGD1.2 billion, representing 1-percent growth in revenue and 1-percent drop in adjusted EBITDA from 2013.

Net profit for the whole of 2014 fell by 10 percent year-on-year to SGD635.2 million.

The firm, which has a Universal Studios theme park within the Resorts World Sentosa grounds, said non-gaming business remained strong last year. “The attractions businesses welcomed more than 6 million visitors in 2014,” said Genting Singapore.

The group is however reorganising its gaming programmes, as Singapore’s two casino resorts – the other being Marina Bay Sands operated by Las Vegas Sands Corp – face increased regional competition.

“The business environment around us has changed rapidly and we face stiff competition,” Genting Singapore said in Tuesday’s filing.

It added: “In recent months, the macro-economic ecosystem has been altered to an extent that the gaming industry has to adjust to a new norm. Resorts World Sentosa has been reorganising its gaming programmes to focus marketing initiatives towards the foreign premium mass and mass-market segments.”

Analysts have said China’s crackdown on corruption has kept Chinese high rollers in check and away from gaming tables. Chinese visitors are viewed as an important target group for Singapore’s casino resorts.

The group said it had invested SGD195.4 million in relation to the development of a casino resort in South Korea’s Jeju Island. Genting Singapore broke ground on February 12 on the US$1.8-billion Resorts World Jeju, which will open progressively from 2017.

The casino operator is also carrying out preliminary studies in relation to plans to invest in Japan if casino gambling is legalised there. “We have been closely evaluating the process and environment, and commenced preliminary studies,” it said.

Genting Singapore has set up several subsidiaries in Japan in the likelihood that the country will legalise casino gaming, but such proposal has yet to be introduced during the current parliamentary session.