Bad debt provisions weighed on Genting Singapore's fourth-quarter earnings and caused the casino operator to swing into the red.
The Singapore-listed company posted a net loss of $7.8 million for the quarter ended Dec 31, due also to higher finance costs. Its revenue came in at $547.4 million, down 14 per cent from the year before.
It posted a net profit of $89.2 million a year earlier. For the full year ended Dec 31, its net profit plunged 85 per cent to $75.2 million.
Bad debt provisions fell to about $45.3 million in the quarter from nearly $82 million a year earlier. But for the full year, bad debts jumped to $270.7 million from $262 million.
Gaming revenue fell 19 per cent to $374 million as a result of lower VIP gaming volume as the group continued to tighten its credit policy.
"Operationally, the two IRs (integrated resorts) seem to be diverging, with Marina Bay Sands taking on more market share as we have seen in the past few quarters," Mr Grant Govertsen, managing partner of Union Gaming Research Macau, said.
AT A GLANCE
REVENUE: $547.4 million (down 14%)
NET LOSS: $7.8 million
DIVIDEND: 1.5 cents a share (up from 1 cent a share)
"RWS, on the VIP side, got burned last year with too liberal a credit policy. Clearly, they have cut back on the extension of credit to VIP players and, as a result, their share of VIP volumes has dropped dramatically."
The strength of the Singdollar to the Malaysian ringgit and Indonesian rupiah has not helped their earnings either, he added.
In the quarter, the group said it disposed substantially all of its remaining portfolio investments.
The group's profit was affected by fair value losses of $79.8 million from the disposal of some financial assets, compared with a gain of $153 million a year earlier.
But Mr Govertsen noted that Genting is still "generating cash flow, and sitting on a lot of cash on its balance sheet". "Their earnings are still positive, so it's not like they have to eat into their cash," he said.
A dividend of 1.5 cents per share was declared for the period, up from one cent a year earlier.
"2015 has been a challenging year for the Asian gaming industry. Despite the negative environment, the group achieved an adjusted Ebitda of $915 million. Our focus remains on developing the regional premium mass and mass gaming business," Genting said. On earlier reports that some 30 employees had been laid off, a spokesman clarified that these departures were based on their staff performance appraisal.
The latest numbers from Genting show that it continues to cede market share to its rival Marina Bay Sands (MBS). MBS' Ebitda - a measure of profit before tax, interest and other items - fell 34.8 per cent to US$338.2 million (S$475 million). In comparison, Genting's Ebitda dipped 5 per cent to $181.3 million in the same period.
Genting reported a loss per share of 0.06 cent, compared with earnings per share of 0.73 cent for the fourth quarter of 2014. Net asset value was 61 cents as at Dec 31, down from 61.1 cents as at Dec 31, 2014.
Genting Singapore shares closed flat at 70.5 cents ahead of the results.