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Genting Singapore posts lowest annual profit in five years

Genting Singapore posts lowest annual profit in five years
February 21, 2016

Genting Singapore, operator of the Resorts World Sentosa integrated resort, which is 53% owned by Genting Bhd of Malaysia, posted its lowest annual profit in five years, hit by a lower premium gambling market due to the group’s continued tightening of its credit policy and higher finance costs.

In a filing with the Singapore securities exchange last week, Genting Singapore’s net profit fell 70% to S$193.06 million (US$137.4 million) for the financial year ended 31st December 2015 (FY15) from S$635.21 million (US$452 million) a year ago.

Revenue for the year fell 16% to S$2.4 billion (US$1.7 billion) from S$2.86 billion (US$2.04 billion) in FY14.

Genting Singapore posted a 70% decline in FY15 earnings to S$193 million (US$137 million), its smallest annual profit in five years.

The market seems to be anticipated Genting Singapore’s FY15 performance.

For the fourth quarter ended 30th December, the company posted S$21.96 million (US$15.6 million) in net profit, 82% down from S$118.81 million (US$84.5 million) in the same quarter last year.

Revenue for the quarter fell 14% although Universal Studios Singapore's attendance hit a record high during the quarter.

Explaining the results, a Genting Singapore statement advised “gaming revenue was impacted by a lower VIP gaming market as we continue to tighten our credit policies. The decrease in revenue was partially mitigated by lower operating costs and overheads, which was achieved through various operational efficiency improvement initiatives.”

Its gaming segment’s revenue for the fourth quarter dropped 19% while its non-gaming segment, which contributed about 30% of Genting Singapore’s revenue, posted a 2% decline in revenue in fourth quarter.

Nonetheless, the company said its non-gaming segment, mainly contributed by Universal Studios Singapore, reported a strong performance with attendance hitting a record high of 1.2 million for the quarter, the highest recorded since opening in 2010.

The statement added “2015 has been a challenging year for the Asian (gambling) 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.”

The company said it expected to begin sales of its residential portion of Resorts World Jeju in South Korea in the second quarter of this year.

It concluded “development of Resorts World Jeju is progressing as planned. Construction of the hotels, retail and entertainment parts of the integrated resort plot has commenced.

“RWS will continue to leverage on strategic alliances to drive new and repeat visitation.”

Image: Universal Studios Singapore's attendance hit a record high of 1.2 million guests in the fourth quarter of 2015, the highest recorded since its opening in 2010.

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