Genting Singapore Plc, the developer and owner of the Resorts World Sentosa casino resort in Singapore, posted net profit of SGD131.7 million (US$106 million) for the second quarter of 2014, 22-percent down from a year earlier.
Genting Singapore, more than half owned by Malaysia’s Genting Bhd, said revenue for the period rose by 6 percent year-on-year to SGD751 million. Gaming revenue accounted for 79.5 percent of all revenue in the three months to June 30, the company said in a filing on Thursday.
“The gaming business recorded a growth of 9 percent from higher rolling volume and win percentage in the premium player business,” the casino operator said.
Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) edged up 1 percent from a year ago to SGD313.8 million.
For the first half of 2014, Genting Singapore reported revenue of SGD1.6 billion and adjusted EBITDA of SGD714.1 million.
“The Singapore integrated resort continues to generate a steady stream of revenue for the group, contributed by a healthy growth in the rolling volume and win percentage of the premium player business,” Genting Singapore said.
The company recorded a greater than expected impairment charge on trade receivables in the second quarter of 2014 – SGD82 million, up from SGD32 million a year earlier, “relating to VIP debt that is between 9 and 12 months old and that management feels will be a challenge to collect,” Union Gaming Research Macau Ltd said in a note on Friday.
“Management’s tone with respect to current trends was notably less optimistic than before, with expectations of a softening VIP customer over the coming two to three quarters (weakness in their primary VIP customer base out of SE Asia),” the research house said.
Union Gaming maintained its neutral outlook on Genting Singapore, saying it doesn’t “see material upside” to estimates for Resorts World Sentosa over the next several quarters.
Shares in the company however could potentially see some near-term lift in the event Japan legalises casino gambling later this year, said Union Gaming, adding “it is still too early to get excited about the Jeju project in South Korea” which might open by 2018.
Construction of the US$2.2 billion casino resort on Jeju is expected to start in the third quarter of 2014, after project partners Genting Singapore and mainland China developer Landing International Development Ltd decided to postpone the ground-breaking ceremony originally scheduled for June 24.
Genting Singapore is also eyeing the Japanese market. “We are optimistic the [Integrated Resorts Promotion] Bill will pass before the end of this year, in the up-coming fall Diet session,” the company said in Thursday’s statement.
“Our team continues to monitor the developments and actively prepare for events that may arise upon the passing of this first phase bill,” it added.
Genting Singapore has already set up nine indirect wholly-owned subsidiaries in Japan. “The group has sufficient financial resources and is well-placed to bid for this opportunity,” it said.
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”We do not believe that reopening the advance notice nomination deadline [for board directors] is appropriate or justified”
Daniel Boone Wayson
Chairman of the Wynn Resorts board of directors