UPDATE: Genting Singapore reports 2Q19 net profit dropped 5 percent

Genting Singapore’s Resorts World Sentosa; taken 2018Genting Singapore’s Resorts World Sentosa; taken 2018

This article was originally published on Friday, 2 August 2019 at 17:34 SGT; it has since been updated.

Genting Singapore reported Friday its second quarter net profit dropped 5 percent on-year to S$168.41 million amid a “significant decline” in the mass-gaming segment, offset by a high rolling win percentage in the VIP segment.

Revenue for the quarter ended 30 June rose 14 percent on-year to S$636.76 million, the integrated casino resort operator said in a filing to SGX.

“Underlying mass gaming business experienced significant declines in the quarter, and would have been further impacted if not for considerable increased spending to tap the regional markets. Adding to the decline were the effects of a slowing local economy and within the region,” Genting Singapore said.

“Amidst a confluence of challenging headwinds, this decline would have been significant if not for the high rolling win percentage in the VIP rolling business segment at Resorts World Sentosa,” it added.

The casino operator reported second-quarter earnings before interest, tax, depreciation and amortization (EBITDA) rose 6 percent on-year to S$296.80 million.

But it added, on a hold-normalized basis, it would have generated an adjusted EBITDA of around S$230 million, a decline of 20 percent.

“During the quarter, our primary attractions at RWS welcomed an average daily visitation of over 20,000, while our hotels continued to register a respectable occupancy rate of 85 percent,” the filing said. “The group has drawn up plans to retire certain assets, in connection with the expansion and transformation of our world-class integrated resort and hence, higher depreciation costs were recorded.”

In its outlook, Genting Singapore said it beginning to implement its S$4.5 billion expansion plan, starting with the revamp of its existing theater into an adventure dining playhouse, scheduled to open in 2021.

“We are on track to execute the development plans to progressively unveil an exciting series of marquee attractions with new and enhanced visitor experiences. This transformation will also include two new luxury hotels of 1,100 keys and state-of-the-art MICE facilities,” Genting Singapore said.

For the proposed Japan integrated resort, the company said it met the application guidelines and criteria for the Osaka proposal and has received confirmation that its registration for the request-for-concept has been approved by the local government.

“Having operated a highly successful IR that encompasses the full spectrum of a true IR in Singapore, we are well-positioned to submit a world-class concept which will enhance Japan’s appeal as a global MICE and leisure destination,” the company said.

Genting Singapore declared an interim dividend of 1.5 Singapore cents a share, unchanged on-year.

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