Genting Singapore suffers worst quarter since RWS' 2010 opening

Genting Singapore, which owns Universal Studios Singapore, closed the second quarter with a net loss of $163.3 million, a sharp reversal from the net profit of $168.4 million in the same period a year ago.
Genting Singapore, which owns Universal Studios Singapore, closed the second quarter with a net loss of $163.3 million, a sharp reversal from the net profit of $168.4 million in the same period a year ago.ST FILE PHOTO

Genting Singapore suffered its worst quarter since its integrated resort (IR) opened in 2010, as pandemic-induced disruptions to the global travel and tourism industry, coupled with a shutdown of nearly three months, dragged the Singapore-listed casino operator into the red in the second quarter.

It closed the quarter with a net loss of $163.3 million - the worst quarterly performance since Resorts World Sentosa (RWS) opened.

This was a sharp reversal from the net profit of $168.4 million in the same period a year ago.

"With tourism being the main driver of the group's business, our operations and financial performance have been severely impacted. At the onset of the pandemic, visitor arrivals dropped very significantly from February," Genting Singapore said in its quarterly business review released after market close yesterday.

Owing to the circuit breaker, RWS suspended all offerings, including Universal Studios Singapore, SEA Aquarium, Adventure Cove Waterpark and Dolphin Island, hotels and the casino, from April 6 to June 30.

"Despite the swift implementation of a series of cost-containment measures including payroll rationalisation and other productivity initiatives, the impact of suffering almost zero revenue during the temporary closure period in the second quarter of 2020 was devastating," the group said.

"For the rest of the year, the group remains pessimistic on the overall financial performance as global travel remains highly restrictive," it added.

Explaining the "painful but necessary decision" to retrench part of its workforce last month, Genting Singapore said: "The medium-term outlook for the entire travel environment remains significantly challenged. Air travel in Asia is only expected to reach 50 per cent of pre-Covid-19 levels by June 2021."

RWS' revenue for the three months to June 30 plunged 94 per cent to $41.3 million from $636.8 million a year ago, as the fallout from the pandemic devastated both its gaming and non-gaming revenues.

The temporary closure of its casino and attractions sent gaming revenues plunging 99 per cent to just $6.5 million in the second quarter, from $441.1 million a year ago, while non-gaming revenues skidded 92 per cent to $16.3 million from $195 million a year ago. Investment, hospitality and support services, however, rose to $18.5 million in the second quarter from $604,000 a year ago.

The group's Ebitda - a measure of profit before tax, interest and other items - swung into the red, with net losses of $84.9 million in the second quarter from a net profit of $294.4 million a year ago.

Likewise, rival Marina Bay Sands skidded into the red in the second quarter on net losses of US$113 million (S$155 million), a sharp fall from the net profit of US$346 million a year ago.

Revenue - from its casino, mall, convention centre, hotel rooms and food and beverage - plummeted 96.7 per cent on the year to just US$23 million for the quarter, from US$688 million in the corresponding period last year.

Of this, casino revenue sank to US$7 million from US$468 million previously.

Genting Singapore's shares closed unchanged at 71 cents ahead of the release of its results yesterday evening.

A version of this article appeared in the print edition of The Straits Times on August 07, 2020, with the headline 'Genting Singapore suffers worst quarter since RWS' 2010 opening'. Print Edition | Subscribe