Net profit at Singapore casino operator Genting Singapore Plc rose 35 percent year-on-year in the third quarter, on gaming revenue up a more modest 11 percent, the firm said in a Monday filing to the Singapore Exchange after trading hours.
Such profit at the operator of Resorts World Sentosa was SGD143.79 million (US$105.4 million), compared to SGD106.86 million in the prior-year quarter.
Gaming revenue rose 11 percent to SGD452.05 million, compared to SGD407.42 million in the earlier reporting period.
Basic earnings per share also rose 35 percent for the period, at SGD1.20, compared to SGD0.89 in the same period of 2016.
An interim dividend of SGD0.015 cents per ordinary share had previously been declared for the financial year ending December 31, 2017 and paid to shareholders on September 20, 2017.
Genting Singapore said in commentary accompanying the unaudited results, that adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) had “surged” 37 percent year-on-year to SGD320.1 million, “underpinned by an improved operating margin and lower net impairment on receivables as a result of a more measured credit policy”.
Third-quarter revenue grew 8 percent year-on-year, “supported by a stronger VIP and premium mass business volume” in the period, added the company in its filing. Such revenue was SGD629.87 million, compared to SGD581.49 million in the third quarter 2016. Average hotel occupancy at the resort during the period was 93 percent, according to the filing.
“Genting Singapore reported another strong quarter; hold- adjusted EBITDA of SGD309 million (+7 percent quarter-on-quarter, +44 percent year-on-year) beat our estimate by 11 percent,” investment bank Morgan Stanley Asia Ltd said in a note commenting on the casino operator’s results.
For the nine months ended September 30, the group reported gaming revenue of SGD1.33 billion, up 11 percent on the nearly SGD1.19 billion achieved in the first nine months of 2016.
The firm does not give a breakdown for VIP revenue versus that for the mass market. But according to Morgan Stanley’s note, VIP rolling chip volume at Resorts World Sentosa rose 22 percent quarter-on-quarter, to SGD7.6 billion, “much stronger than 8 percent quarter-on-quarter” recorded by ts Singapore market rival, Marina Bay Sands, which is controlled by Las Vegas Sands Corp.
In a note following the results announcement by Genting Singapore, brokerage Sanford C. Bernstein Ltd said the casino operator was planning a SGD1-billion revamp of Resorts World Sentosa. Quoting Genting Singapore’s management, it added that the project could take up to three years to be completed. “The company is still waiting for the government approval, but there will be no information likely until the first quarter of 2018,” the note added.
Sanford Bernstein had said in a Friday note the institution expected Genting Singapore’s full-year 2017 VIP gross gaming revenue to be SGD762 million, with mass table GGR at SGD914 million, and slot GGR at SGD579 million. That would produce an annual aggregate of SGD2.26 billion, which would be an increase of only 1 percent on the SGD2.23 billion casino GGR the casino firm achieved in full-year 2016.
Genting Singapore’s total revenue for the first three quarters of 2017 was SGD1.81 billion, a rise of 9 percent year-on-year, according to Monday’s filing. The period included a one-off gain of SGD96.3-million on disposal of the group’s interest in a casino resort project in South Korea involving Hong Kong-listed Chinese real estate developer Landing International Development Ltd.
Genting Singapore’s net profit for the first nine months of 2017 stood at SGD468.21 million, up nearly 337 percent year-on-year.
Nonetheless, Sanford Bernstein in its Friday note described the Resorts World Sentosa property as “number two” to Marina Bay Sands.
The brokerage also added that regarding Genting Singapore’s foray into Japan – including issuance of yen bonds – in pursuit of a casino licence there, “investors still need to wait for more certainty before imputing any value” in the firm’s stock price.
(Updated at 8.40am, Nov 7)
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia