Aug 12, 2022 Newsdesk Latest News, Singapore, Top of the deck
First-half net profit at the operator of the Resorts World Sentosa (RWS) casino complex in Singapore fell by 4.3 percent year-on-year, to SGD84.4 million (US$61.3 million).
The result for Genting Singapore Ltd was on group-wide revenue that actually rose 19.5 percent year-on-year, to SGD663.1 million, said the firm in a filing to the city’s bourse after trading on Friday. But cost of sales in the six months to June 30 rose 33.5 percent year-on-year, to SGD463.0 million.
Gaming revenue in the first six months of 2022 grew by 7.3 percent year-on-year, to nearly SGD475.2 million.
The group’s first-half performance had been helped by a second quarter that saw the “reopening of international borders,” and the expression of “pent-up demand” for Resorts World Sentosa’s “gaming and integrated resort tourism offerings,” said the company.
Though it added: “Attendance across all attractions remained below pre-pandemic levels owing to limited international flight capacity and pricey airfares.”
Nonetheless, first-half non-gaming revenue rose 64.9 percent year-on-year, to just under SGD183.0 million.
First-half adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were down 2.7 percent year-on-year, at SGD268.7 million.
For the first three months of the year, Genting Singapore had reported net profit of SGD40.4 million, up 17.3 percent from the previous quarter.
In terms of second-quarter EBITDA, Genting Singapore achieved “49 percent of fourth quarter 2019,” while its Singapore market rival Marina Bay Sands, run by a unit of United States-based Las Vegas Sands Corp, “recovered to 71 percent,” said a Monday note from brokerage Sanford C. Bernstein Ltd.
Analysts Vitaly Umansky, Louis Li and Shirley Yang said this was “partly due” to low hold in VIP gambling at Resorts World Sentosa, and “relative weakness” in the latter’s mass-market GGR, “which resulted in Genting Singapore’s overall GGR [market] share of only 26 percent in the second quarter, versus 39 percent in the first quarter”.
As at 30 June 2022, the gross amount of Genting Singapore’s trade receivables was just over SGD103.6 million, the “majority” of it “related to casino debtors”. Such amount was down from SGD224.1 million in the prior-year period.
Its first-half net reversal of impairment on trade receivables was just over SGD2.7 million, versus a net reversal on impairment of nearly SGD24.7 million in the prior-year period.
The firm proposed a one-tier, tax-exempt interim dividend of SGD0.01 per ordinary share, to be paid on September 20 to such stockholders of record as of August 29.
Genting Singapore said in its discussion of its first-half results, that while there was potential for economic “recession in the near future,” it remained “optimistic” about a “resilient recovery” of its business, post-pandemic.
“Our immediate concern is ongoing challenges in hiring sufficient number of skilled and talented management and rank and file team members,” the firm added.
Genting Singapore stated that work on a SGD4.5-billion expansion of Resorts World Sentosa, pledged to the city-state’s authorities, and known as “RWS 2.0”, was “progressing well”.
It noted: “We are embarking on a makeover of our tourism offerings to enhance the integrated resort’s destination appeal to capitalise on the post-pandemic pent-up demand, in particular from the affluent regional market.
“With refreshed product offerings targeted at the premium market, we are confident that return on invested capital will deliver significant future growth.”
In May, Genting Singapore management had said in commentary it was looking to expand Resorts World Sentosa’s gaming customer base.
(Updated 9.15am, August 15)
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