GGRAsia – Quarterly net profit down 43 pct at Genting Singapore

Quarterly net profit down 43 pct at Genting Singapore

Nov 11, 2014 Newsdesk Latest News, Singapore, Top of the deck

Net profit after taxation at Singapore casino operator Genting Singapore Plc fell 43 percent year-on-year in the third quarter, to SGD127.1 million (US$98.2 million) from SGD222.7 million in the prior-year period.

The group developed and operates the Resorts World Sentosa (RWS) property, which opened in February 2010. The group is also planning via a joint venture with a mainland China firm to open a casino resort at Jeju Island in South Korea.

The latest group quarterly numbers included a SGD39.7 million impairment loss on trade receivables – which was an improvement on the SGD50.2 million loss on trade receivables recorded in the third quarter 2013.

In the second quarter of 2014, Genting Singapore group’s net profit fell 22 percent year-on-year, largely due to greater than expected impairment charges on receivables – which analysts said was mainly in the form of debt owed by VIP gamblers.

Singapore’s two casino resorts – the other being Marina Bay Sands operated by Las Vegas Sands Corp – face increased regional competition, and “potential changes to gaming policies that weigh on their medium-term growth and profitability outlook”, said Fitch Ratings Inc in a statement issued on October 30.

In its latest results Genting Singapore said that in the nine months to September 30, monies owed to the group in “trade and other receivables” rose by 41 percent year-on-year to SGD180.1 million, from SGD127.4 million in the year-prior period.

For the third quarter of 2014, the group reported revenue of SGD644.8 million and adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of SGD253.9 million.

Genting Singapore said that quarterly EBITDA was negatively affected by bad luck in terms of VIP table games hold percentage.

It stated: “On a theoretical normalised hold basis, Resorts World Sentosa would have generated an adjusted EBITDA of SGD397 million; however, the premium player business underperformed due to low win percentage.”

The firm, which has a Universal Studios theme park and other non-gaming offerings within the RWS grounds, added: “Our attractions business continues to achieve strong growth with the average daily attractions visitation growing 10 percent, compared to the second quarter of 2014. Our hotel business enjoyed a high 95 percent occupancy with average daily room rate of SGD408.”

For the first nine months of 2014, the group reported revenue of SGD2.22 billion and adjusted EBITDA of SGD968.0 million, representing 3 percent growth in revenue and a 7 percent increase in adjusted EBITDA as compared to the same period last year.

“This was driven by the strong performance of our premium player business and the higher visitation to Universal Studios Singapore. Despite the 2014 modest growth outlook for Singapore and the continued slowdown in tourism arrivals, RWS continues to generate a steady stream of income for the group.”

Singapore Tourism Board last month reported that in the second quarter of this year, the number of visitors to the city-state from mainland China fell 47 percent judged year-on-year.

Genting Singapore said in commentary on other markets it is exploring: “At the group level, our Korean project development team has been working closely with the relevant local authorities on the development plans of the proposed Jeju Integrated Resort including obtaining the requisite permits and licences. We are encouraged by the positive response of the people and government of Jeju to our proposal, and we look forward to a close working relationship with all our stakeholders there.”

The firm added: “In relation to the group’s plans for Japan, the debate of the Casino Promotion Bill at the Japanese Diet is in progress and our team is actively monitoring the developments. We remain optimistic of the prospects and are supportive of their efforts to realise the goals of integrated resorts development.”