UPDATE: Genting Singapore reports 3Q19 net profit dropped 24 percent

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

This article was originally published on Thursday, 7 November 2019 at 17:56 SGT; it has since been updated with additional details.

Genting Singapore reported Thursday its third quarter net profit dropped 24 percent on-year to S$158.87 million on higher depreciation costs and an unfavorable “hold,” or how much the house won.

Revenue for the quarter declined 7 percent on-year to S$596.06 million, the integrated casino-resort operator said in a filing to SGX.

“As we commence our mega expansion initiatives, higher depreciation costs were recorded as compared to the same period last year, on plans to retire certain assets,” Genting Singapore said.

In April, Genting Singapore committed to investing around S$4.5 billion to revamp and expand its Resorts World at Sentosa integrated resort on Singapore’s Sentosa Island, including growing the Universal Studios Singapore park.

Depreciation increased 43 percent on-year to S$94.76 million in the quarter, the filing said.

Genting Singapore said it had adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of S$278 million for the third quarter on “a confluence of headwinds.” But on a hold-normalised basis, adjusted EBITDA would have been around S$295 million, down 7 percent on-year, the casino-operator said.

“We continue to be positive in attracting the affluent market from the region and leverage on the growing Asian economies,” the company said.

The non-gaming businesses performed well, Genting Singapore said, adding average daily visitation to key Resorts World Sentosa attractions topped 23,000 while the hotels had average occupancy of 94 percent.

Finance costs tumbled 88 percent on-year to S$1.12 million for the quarter after Genting Singapore voluntarily prepared the outstanding S$680 million under its S$2.27 billion syndicated senior secured credit facilities in April, the filing said.

For the nine-month period, Genting Singapore reported net profit fell 12 percent to S$532.75 million on flat revenue of S$1.87 billion.

Outlook

In its outlook, Genting Singapore said preparations for its expansion were proceeding well, with construction to begin in the second half of next year.

New attractions will open every year over the next five years, starting with the Adventure Dining Playhouse, scheduled to open late next year, the casino-resort operator said.

Japan remained the key focus of the company’s diversification plan, with the country recently releasing the draft national guidelines for integrated resorts and with public consultation there progressing, Genting Singapore said.

The company said it has fully responded to a request-for-concept and is preparing one for Yokohama.

“The requirements and expectations of Japanese authorities are complex and of the highest standards, in keeping with the objective of creating true integrated resort (IR) that will enable Japan to achieve a quantum leap for its tourism economy,” Genting Singapore said. “Having operated a highly successful true IR in Singapore that encompasses the full spectrum of tourism offerings, we are committed to delivering compelling proposals.”

 

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