Net profit of casino operator Genting Singapore Plc accelerated by almost 20 percent in the first quarter of 2018 as high rollers returned to Singapore.
In its filing with the Singapore Stock Exchange, Genting Singapore said its net profit for the first three months of the year was SGD217.2 million (US$162.3 million), up 19.9 percent from SGD181.1 million (US$129 million) in the same period in 2017.
Excluding the SGD96.3 million ($68.69 million) one-off gain from the disposal of the group’s investment in South Korea in Q1 2017, Genting’s net profit jump in Q1 2018 was 91 percent.
Genting Singapore, which operates Singapore casino complex Resorts World Sentosa (RWS), reported revenue up 15.1 percent to SGD675.1 million ($505.54 million), while gross gaming revenue rose 16.8 percent to SGD507.4 million, thanks to VIP rolling chip volume rising 36 percent year-on-year.
Operating profit grew 8 percent to SGD281.8 million ($211.02 million) and adjusted earnings before interest, taxation, depreciation and amortization (EBITDA) rose 26.7 percent to SGD358.9 million ($268.76 million).
“The ongoing strategy to focus on affluent regional business proved to be effective as the mass and premium mass business continued to deliver encouraging results,” Genting said.
International brokerage Union Gaming noted that the “upside surprise” in Genting Singapore’s results “was driven almost entirely by higher than expected VIP volume.”
Union Gaming analyst Grant Govertsen noted that Genting Singapore has begun “opening the taps” a bit more now that its credit program is in better shape compared with the previous years when it got “burned by high levels of bad debt.”
“The last two quarters of 2017 saw year-on-year growth in VIP volume of 27 percent and 10 percent, respectively, with volume of around SGD7.5 billion in each quarter… We estimate that [Q1 2018’s VIP] volume was actually closer to SGD9.3 billion,” Govertsen said in a note.
Looking ahead, Genting said that it is actively preparing for the start of Japan’s casino license bidding. The casino operator has expressed optimism that the Japanese Diet will pass all casino-related bills this year.