Flat Earnings At Genting Singapore

Genting resorts worldRevenues were almost flat in the second quarter at Genting Singapore (SGX: G13). The company said revenues rose 1% from S$ 702m to S$708m. Profits inched up 2% from S$ 165m to S$169m.

Genting Singapore (Genting SP) operates their flagship project, Resorts World Sentosa in Singapore, which includes many attractions that includes Universal Studios, casino, hotels and convention centre. As at 30 September 2012, the company had a market capitalisation of S$16.7 billion and ranks among Singapore’s 10 largest companies by market capitalisation.

Commenting on the performance of its second-quarter numbers, Genting SP said:

For the first half of 2013, the Group reported revenue of S$1,377.6 million and Adjusted EBITDA of S$560.5 million. The Singapore IR continues to generate a steady stream of revenue, with the Marine Life Park contributing to an expanded revenue base in the non-gaming segment.

The company added:

“Compared to the first half of 2012, the Singapore IR did well by achieving significant increase in premium players’ rolling volume but net revenue was affected by a lower win percentage.

There are worries on many fronts with the rising debt from Chinese high-rollers, slow down in tourist arrivals due to regional competition and higher labour costs. To mitigate all these challenges, Genting SP has been actively ramping up additional revenue streams by enhancing its resort offerings and building new hotels.

For example it is constructing a new hotel in the Jurong Lake District, a new growth area in the western part of Singapore with commercial, business and leisure facilities. The hotel is scheduled for a soft opening in the middle of next year.

According to another statement by Genting SP, another potential catalyst may come from the investment in an integrated resort in Japan. But it is currently monitoring the developments on the passing of gaming legislation in Japan.

As of 30 June 2013, no dividend has been declared for the quarter. Based on the closing price of $1.335, Genting SP sports a dividend yield of 0.75% (final dividend of 1 cent paid on 20 May 2013) and a lofty valuation of 32 times profit.

The Motley Fool’s purpose is to help the world invest, better. Click here now  for your FREE subscription to Take Stock — Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock — Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.

Like us on Facebook to keep up-to-date with our latest news and articles. The Motley Fool’s purpose is to help the world invest, better.  

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.