Genting Singapore’s Q3 earnings surges to $77.1M

TAGs: Genting Singapore, Leonard Postrado

Resorts World Sentosa casino operator Genting Singapore Plc. saw its earnings grew more than twofold during the third quarter of 2016.

Genting Singapore’s Q3 earnings surges to $77.1MIn a filing before the Singapore Stock Exchange on Thursday, Genting Singapore’s net profit for the July to September 2016 period zoomed to SGD106.9 million (US$77.1 million) compared with the SGD37.2 million (US$26.85 million) in the same period a year ago.

The casino operator also announced that its net profit during the January 1 to September 30, 2016 period rose by 29 percent to $107.2 million (US$ 77.36 million), while revenue fell 10 per cent to SGD1.67 billion (US$ 1.21 billion).

Genting Singapore attributed its solid third quarter performance on its “ongoing commitment to focus on better margin business and managing operational efficiency for better margins.”

“The group performed very well in this third quarter 2016,” Genting Singapore said. “This achievement has been the fruits of our ongoing commitment to focus on better-margin business and [on] managing operational efficiency for better margins.”

On the other hand, gaming revenue at its integrated resort in Sentosa dropped 10 percent to $407.4 million (US$ 294.02 million) while turnover dropped 9 percent to $581.5 million (US$419.67 million)

Surprisingly, the group has proposed an interim dividend of SGD0.015 (US$0.011), to be paid out on Dec 7. No dividend was declared previously.

Earnings per share for the quarter came in at 0.89 cents, compared with 0.31 cents previously. Net asset value per share stood at 60.4 cents as at Sept 30, slightly lower than the 61 cents as at Dec 31 last year.

Despite seeing a strong, third quarter earnings, Genting Singapore pointed out that the firm remain cautious, particularly in the VIP segment, due to the prevailing uncertainty in Asia’s gaming industry.

The company reported an impairment loss on trade receivables – including credit extended to VIP players but not paid back – of SGD50.2 million (US$36.09 million) for the quarter, down 46 percent from the prior-year period.

“Since early 2016, we have scaled down this business segment and the provision for bad debts related to this segment has consequently reduced. We will continue to see improved margins in this segment over the next few quarters,” it said.

For international multinational financial services firm Morgan Stanley, the declining VIP impairment cost “could mean the first meaningful annual EBITDA growth in 2017″ for Genting Singapore.

“Accounts receivable of SGD240 million is down 39 percent quarter-on-quarter and 80 percent from the peak, which will result in impairment charges (SGD50 million in third quarter 2016) falling further, driving EBITDA up in 2017,” the international financial institution said. “We expect 2017 EBITDA of SGD911 million, up 30 percent year-on-year.”


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