Genting Singapore has pointed to a series of challenging headwinds for a 5% year-on-year decline in net profit to SG$168.4 million in the three months to 30 June 2019, warning the decline would have been significantly greater if not for a high VIP win percentage.
The falling profit came despite a 22% increase in gaming revenue to SG$441.1 million at Resorts World Sentosa – also boosted by the VIP results – with the company performing poorly in mass and facing high bad debt expenses. Adjusted EBITDA increased 11% year-on-year to SG$294 million but would have declined 14% if not for the VIP win rate of 3.7%, up from 2.6% 12 months earlier.
In a management discussion following the release of its 2Q19 results, Genting Singapore said, “Amidst a confluence of challenging headwinds, this [revenue] decline would have been significant if not for the high rolling win percentage in the VIP rolling business segment at Resorts World Sentosa.
“Underlying mass gaming business experienced significant declines in the quarter and would have been further impacted if not for considerable increased spending to tap the regional markets. Adding to the decline were the effects of a slowing local economy and within the region.
“The underlying revenue drivers have been impacted by various factors that will continue to affect our business through the rest of this year. We maintain our cautious stance on the premium segment as the regional economic environment faces uncertainty and will impact consumer confidence. Nevertheless, Resorts World Sentosa will continue to innovate its offerings to enhance and diversify its appeal to various target markets around the region.”
Genting Singapore also confirmed it has submitted a Request for Concept to officials in Osaka in pursuit of a Japan IR license, with Yokohama also on the horizon should the city decide to enter the running. It has, however, ruled out regional destinations.
