Genting Singapore posts 3Q21 net profit grew 11 percent despite revenue drop on one-time gain

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

Genting Singapore reported Tuesday its third quarter net profit after tax grew 11 percent on-year to S$60.71 million from S$54.45 million a year earlier due to a one-off net exchange gain.

For the July-to-September quarter, the Resorts World Sentosa operator posted a net exchange gain of S$34.72 million, compared with a net exchange loss of S$18.72 million in the year-ago period. The net exchange gain included a write-back of accounting accruals of S$45.9 million which were made in prior periods and were related to the Yokohama integrated resort bid.

The accruals were no longer needed, Genting Singapore, or GENS, said in a filing to SGX. In September, Yokohama City canceled the integrated casino-resort bid process after the city elected a new mayor, Takeharu Yamanaka, who was adamantly opposed to building an integrated casino resort (IR) there.

Adjusted earnings before interest, tax, depreciation and amortisation (ebitda) — which excludes the net exchange gain and other one-offs — dropped 31 percent on-year to S$102.53 million, the integrated-casino-resort operator said.

Revenue for the third quarter dropped 16 percent on-year to S$194.71 million from S$212.92 million in the year-ago period, Genting Singapore said.

Singapore eased some Covid-related measures starting from July 2020, although some restrictions lingered, including limits on group sizes and on allowing tourists into the city-state. In July 2021, Singapore re-imposed some restrictions, including ceasing all dine-in at restaurants, hawker centers and food courts, and limited social gathering sizes to a maximum of two people. The restrictions were eased somewhat in August 2021, before some were re-imposed in September.

Hospitality-related businesses as well as food and beverage outlets were hurt by the measures.

Genting Singapore noted that while most of its key offerings at Resorts World Sentosa remained operational, it was at “considerable lower levels.”

Outlook

Tourism-dependent Genting Singapore was upbeat on the outlook, citing Singapore’s implementation of vaccinated travel lanes (VTLs) for business and leisure travel from some countries.

“This is a significant milestone in the opening of our borders. However, in the short term, we expect minimal increase in overseas visitors’ footfall as the countries designated for this quarantine-free travel are from non-traditional source markets,” the company said. “At the same time, there may be an impact on the IR’s visitorship from an outflow of the local population to these countries due to the pent-up demand for international travel.”