Genting Singapore recently released its profit report for the second quarter of 2018 and showed a substantial gain over the same period last year. Whereas the casino operator’s net profits for the second quarter last year were US$104.8 million, there was an improvement this year to US$129.6 million. This is especially strong given the fact that Genting Singapore showed a 6% decline in revenue during the same period.
EBITDA (earnings before interest, taxation, debt and amortization) on the property fell by 8% year-on-year to close at US$200.3 million. Gaming revenue was fell, dropping 8% from the same period last year to US$297 million. No information was provided over VIP and mass market operations.
According to the brokerage firm Sanford C. Bernstein Ltd., “Management said that the company continued to extend more credit (prudently) to VIP players, leading to robust VIP volume growth during the quarter (volume +27% year-on-year, VIP gross gaming revenue +10?% year-on-year), but hold was low at 2.6 percent.”
Zhen Gong, Vitaly Umansky and Kelsey Zhu, analysts for Bernstein, added, “Mass revenue had been impacted by competition from Marina Bay Sands and casinos in other markets, with table drop +11 percent year-on-year (+16 quarter-on-quarter) and slots handle increase 6 percent year-on-year (-1 percent quarter-on-quarter), but what appears to be low hold negatively impacting mass tables gross gaming revenue.”
In its filing last Friday, Genting Singapore, which operates the Resorts World Sentosa (RWS) casino, said, “In the gaming segment, our VIP rolling volume showed encouraging year-on-year growth but luck factor was not in our favour,” Genting Singapore said in the filing to the Singapore Exchange on Friday. “On a hold-normalised basis, Resorts World Sentosa would have generated an adjusted EBITDA of approximately SGD293 million…Resorts World Sentosa continues to be at the forefront of Singapore’s leisure and entertainment industry, attracting visitors from all around the world. Our signature attractions performed well during the second quarter of 2018 with average visitation exceeding 18,000 daily.”
The company further stated that it is planning a series of “exciting gourmet and lifestyle events” at RWS soon. It added, “Following the popularity of the gastronomic events last year, over the next two months, we will be bringing back the ‘RWS Street Eats’, featuring iconic street eats from Southeast Asia and ‘The Great Food Festival’, Singapore’s largest food and lifestyle event led by international celebrity chefs.”
The company is said to be a strong contender for a gaming license in Japan now that gambling has been legalized in the country. Japanese legislators have often used Singapore casinos as an example when discussing social responsibilities, and Genting Singapore, with more than US$2.2 billion in reserves, has more than the necessary amount of cash needed to build a Japanese resort that could find favor with lawmakers.