Genting Q4 net profit up 5% despite 13% revenue drop

GENTING Singapore - the casino operator that runs the Resorts World Sentosa (RWS) integrated resort - has posted a fourth-quarter net profit attributable to shareholders of $140.3 million, up 5 per cent from $133.2 million a year earlier.

This was after apportioning $29.7 million attributable to holders of perpetual capital securities.

The group proposed a final cash dividend of one cent per ordinary share, the same as in the preceding year.

Revenue fell 13 per cent to $692.9 million.

The mainboard-listed company's core earnings - measured by adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) - came in at $250.3 million, a 32 per cent decline from $369.3 million a year earlier.

A Genting spokesman noted that while there was higher volume in its premium gaming business at the RWS casino, overall gaming revenue registered a drop because of lower win percentages.

Gaming revenue for the fourth quarter came to $508.6 million, 19 per cent lower than the $627 million for Q4, 2012.

A helping factor was a 62 per cent drop in taxation to $20.3 million.

Earnings per share for the fourth quarter worked out to 1.15 cents, a shade higher than the 1.09 cents from a year earlier.

For the full year, Genting's net profit attributable to shareholders was marginally higher at $589.4 million, one per cent more than the $587.5 million previously. Revenue for the year came to $2.85 billion, a 3 per cent decline from $2.95 billion a year earlier.

The Genting spokesman added that RWS's non-gaming segments continued to register healthy growth with strong visitation numbers.

The property's various attractions such as the Universal Studios Singapore theme park collectively had an average of over 20,000 people passing through their gates each day.

More people stayed at RWS's hotels last year as occupancy rates reached 92 per cent, up from 91 per cent a year earlier. The average room rate, however, fell to $411, compared to $447 a year ago.

The Genting spokesman said that RWS was "generally positive" about its business, even as it remained mindful of the overall Singapore tourism outlook. There are plans to increase marketing spending to attract more tourists, although this will "potentially dilute" the yield.

"Our net income will be challenged by the tight labour market, coupled with rising costs. While we are working on improving productivity in some of our business segments, the labour-intensive nature of our business only allows for limited gains from any productivity measures that we undertake," he said.

"The tight labour situation will make it more challenging for us to deliver the high service standards that our customers have come to expect from us."

Having recently announced a proposed investment in an integrated resort in Jeju, South Korea, Genting said that it would continue to look at other opportunities in the gaming, leisure and entertainment, and hospitality sectors. The group is also monitoring the proposed passing of gaming legislation in Japan.

The financial results were released after the market closed. Genting shares ended the day at $1.40, up 1.5 cents.