Genting Singapore H1 profit up 29%; resort operator flags competitive headwinds
Revenue for the period is up 25% to S$1.36 billion
RESORT and casino operator Genting Singapore reported a 29 per cent increase in profit for the first half of the year to S$356.9 million.
The rise was broadly in line with revenue, which climbed 25 per cent to S$1.36 billion.
Gaming revenue from the company’s Singapore integrated resort rose 28 per cent to S$957.6 million, while non-gaming revenue increased 19 per cent to S$397.9 million.
In a commentary accompanying the release of its results on Wednesday (Aug 14), the company said geopolitical headwinds and high transport and accommodation costs “dented growth” in the second quarter of the year.
On a quarter-to-quarter basis, Genting’s Q2 adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) were weaker due to seasonality, a significantly lower VIP hold than in Q1, and the closure of Hard Rock Hotel for renovations and rebranding.
The hold rate is the ratio of the amount won by the casino to the cash buy-in, and is one indicator of a casino’s profitability.
A weaker set of results had been expected from Genting after US-listed Las Vegas Sands (LVS) in July reported a quarter-on-quarter decline in the hold-adjusted Ebitda of its Singapore resort Marina Bay Sands (MBS).
Genting’s Q2 adjusted Ebitda of S$201.3 million is, however, below the expectation of CGS International analyst Tay Wee Kuang.
In a Jul 25 report following the LVS results announcement, Tay said the quarter-on-quarter decline at MBS was expected “following a seasonally stronger first quarter that benefited from inbound tourists during the Lunar New Year festivities”.
He had projected Genting’s adjusted Ebitda to come in at between S$260 million and S$280 million.
In its announcement, Genting management also flagged testing times ahead. “The travel industry is anticipated to continue its recovery in 2024 on the back of enhanced global flight connectivity and a strong rebound of departures from our top source markets,” the company said.
“While we expect that the number of visitor arrivals to Singapore will grow, a full recovery to pre-pandemic levels could face headwinds due to recovery of regional travel destinations and rising geopolitical tensions.”
It will “continue to refresh and rejuvenate existing offerings”, and four global blockbuster intellectual property partnerships are expected in the second half – Mega Minions from Illumination’s Despicable Me 4 at Universal Studios Singapore, Genshin Impact at SEA Aquarium, Netflix’s global hit Sweet Home at the upcoming Universal Studios Singapore Halloween Horror Nights, and Harry Potter: Visions of Magic at RWS.
“These differentiated programmes and events are expected to boost both visitorship and spending at RWS,” the company added.
Shares of Genting Singapore closed Wednesday at S$0.815, up 1.9 per cent or S$0.015, before the results were released.
