Genting Singapore roars back into the black in Q4

Genting's bottom line was helped by a net foreign exchange gain, as well as record high visitor arrivals and tourism receipts.
Genting's bottom line was helped by a net foreign exchange gain, as well as record high visitor arrivals and tourism receipts.ST FILE PHOTO

Net profit rises to $159.2m as revenue edges up 2% to $557.7m and debt provisions shrink

Genting Singapore hit the jackpot in the fourth quarter, raking in net profits of $159.2 million.

This is a sharp reversal from a net loss of $7.8 million in the same period a year ago, as the Resorts World Sentosa operator continues to whittle down bad debt provisions while notching up better gaming revenue from its premium player business.

Bad debt provisions shrank 14 per cent to $38.9 million as the group continued to tighten its credit policy for the VIP gaming business, and "remodel" its commission structure amid an uncertain economic environment.

The bottom line was also helped by a net foreign exchange gain of $65.5 million, compared with a loss of $22.6 million a year earlier.

Revenue for the three months to Dec 31 edged up 2 per cent to $557.7 million, weakened in part by an 8 per cent drop in non-gaming revenues to $158.5 million.

  • 18,000

  • Average daily visits to Genting's attractions.

  • 92%

  • Occupancy rate at its hotel business.

  • 7.7%

  • Growth of tourist arrivals to Singapore, thanks to markets such as China and Indonesia.

POTENTIAL OPPORTUNITY

Genting's current price ... seems to imply an optimistic 40 per cent chance of winning a Japan casino licence, based on our rough estimates, given the lack of details at this point.

OCBC INVESTMENT RESEARCH, on bidding for a casino licence in Japan.

Genting's attractions business got about 18,000 average daily visits, while its hotel business registered a 92 per cent occupancy rate.

The group's Ebitda - a measure of profit before tax, interest and other items - jumped 29 per cent to $233.7 million. This was due largely to a 7 per cent jump in gaming revenue to $398.6 million because of a higher rolling win percentage in the premium player business.

Full-year net profit more than trebled to $266.3 million even as revenue slid 7 per cent to $2.23 billion.

Record high visitor arrivals and tourism receipts to Singapore last year also helped. Arrivals grew 7.7 per cent to 16.4 million, thanks to markets such as China and Indonesia; while receipts expanded 13.9 per cent to $24.8 billion.

But rival Marina Bay Sands keeps winning the market share battle.

MBS last month posted a net profit of US$366 million (S$519 million) for the fourth quarter, up 8 per cent on the US$339 million recorded a year earlier. Revenue rose 2.8 per cent to US$723 million, helped by a 5.6 per cent increase in gaming turnover to US$563 million.

VIP gaming revenue fell 18.4 per cent to US$8.26 billion in the three months to Dec 31.

Like MBS, Genting is also keenly watching for developments in Japan following the country's move in December to legalise casinos. Proponents are hoping to pass further legislation this year that would enable the first casino to open there in the early 2020s.

"We continue to track the progress of the IR execution bill, which will pave the way for the formal bidding process for a Japan gaming licence. The group has sufficient financial resources and is well-placed to bid for this opportunity," Genting said in an SGX filing yesterday. OCBC Investment Research noted: "Genting's current price... seems to imply an optimistic 40 per cent chance of winning a Japan casino licence, based on our rough estimates, given the lack of details at this point."

A final dividend of 1.5 cents per share was declared for the period, unchanged from a year earlier.

Genting reported earnings per share of 1.33 cents, compared with loss per share of 0.06 cent for the fourth quarter of 2015. Net asset value was 60.1 cents as at Dec 31, down from 61 cents a year earlier.

Its shares closed 1 per cent or one cent higher at 98 cents ahead of the release of its results yesterday.

A version of this article appeared in the print edition of The Straits Times on February 23, 2017, with the headline 'Genting S'pore Q4 earnings back in the black'. Print Edition | Subscribe