Pre-tax earnings were essentially flat for Genting Singapore in the second quarter as mass-market growth at Resorts World Sentosa continues to prove challenging.
Singapore-listed Genting (GENS), a majority-owned subsidiary of Malaysia’s Genting Berhad and part of the Genting Group resort conglomerate, said EBITDA rose by 1% in the April-June quarter to S$313.8 million (US$252 million). Net revenues rose 6% to $763 million, mainly on VIP volume, which was up 9%, and better than average hold.
RWS emerged from the quarter with an estimated 60% of Singapore’s two-casino VIP market, but was cautious on its outlook for the high end, as the resort’s core Southeast Asian and Indonesian customer base continues to display softness. The costs associated with the business continue to be sizable as well. GENS took a greater than expected impairment charge on trade receivables, mostly in the form of VIP credit, amounting to $82 million during the quarter, versus $32 million in the same period last year, and 41% higher than the first quarter.
Revenue from mass tables and slots was down a combined 4%, and Union Gaming Research Macau is forecasting mass to drop another 1% in the second half.
“We do not think there is much (if any) potential for growth in this segment over the near or medium terms,” the firm said in a client note, adding that “With new question marks on RWS’ VIP program, along with an already stagnant mass market, and the first [year-on-year] decline in non-gaming revenue since RWS opened, our neutral outlook on the company remains unchanged.”
Genting Singapore is eyeing growth beyond the domestic market, investing in a mixed-use resort with a casino on the South Korean island of Jeju, a popular destination for tourists from China, and moving to occupy a strong position in Japan if the country legalizes casinos.
“Our team continues to monitor the developments and actively prepare for events that may arise upon the passing of this first phase bill,” the company said. “The group has sufficient financial resources and is well-placed to bid for this opportunity.”
