Nov 03, 2016 Newsdesk Latest News, Singapore, Top of the deck  
Genting Singapore Plc reported net profit of SGD106.9 million (US$77.1 million) for the third quarter of 2016, compared to SGD37.2 million in the prior-year period. Adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) rose by 12 percent year-on-year to SGD233.6 million.
The company is the operator of Singapore casino complex Resorts World Sentosa (pictured) and is a subsidiary of Malaysian conglomerate Genting Bhd.
“The group performed very well in this third quarter 2016,” Genting Singapore said in Singapore Exchange filing on Thursday. “This achievement has been the fruits of our ongoing commitment to focus on better-margin business and [on] managing operational efficiency for better margins,” the firm added.
Genting Singapore reported aggregate revenue of SGD581.5 million for the three months to September 30, down by 9 percent from a year earlier.
The company’s gaming revenue fell by 10 percent year-on-year, to SGD407.4 million. Genting Singapore said it remained “cautious” regarding its VIP business, given the “ongoing uncertainty in the gaming industry in Asia”.
“Since early 2016, we have scaled down this business segment and the provision for bad debts related to this segment has consequently reduced. We will continue to see improved margins in this segment over the next few quarters,” said the firm.
The company reported an impairment loss on trade receivables – including credit extended to VIP players but not paid back – of SGD50.2 million for the quarter, down 46 percent from the prior-year period.
Investment bank Morgan Stanley said the declining VIP impairment cost “could mean the first meaningful annual EBITDA growth in 2017″ for Genting Singapore.
“Accounts receivable of SGD240 million is down 39 percent quarter-on-quarter and 80 percent from the peak, which will result in impairment charges (SGD50 million in third quarter 2016) falling further, driving EBITDA up in 2017,” said the Morgan Stanley analysts. “We expect 2017 EBITDA of SGD911 million, up 30 percent year-on-year,” they added.
“Together with a measured approach in the premium mass market, we are confident of a sustainable earnings growth into the next year,” said Genting Singapore.
The company stated that Resorts World Sentosa “delivered a healthy set of results against the backdrop of a challenging operating environment”.
The property’s revenue increased by 21 percent quarter-on-quarter “from the favourable performance of the attractions and hotel business as well as improved VIP rolling win percentage”.
For the first nine months of 2016, Genting Singapore registered revenue of SGD1.67 billion, down by 10 percent from the prior-year period. Adjusted EBITDA for the nine-month period declined by 26 percent year-on-year to SGD545.3 million.
Genting Singapore announced on Thursday an interim dividend of SGD0.015 (US$0.011) per ordinary share, to be paid on December 7.
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