Genting Singapore PLC’s Latest Earnings: What Investors Should Know

Genting Singapore PLC (SGX: G13) reported its fiscal first-quarter earnings last Friday. The reporting period was for 1 January 2016 to 31 March 2016.

As a brief background for some context, Genting Singapore is the operator of the integrated resort, Resorts World Sentosa. Among the resort’s many attractions are one of Singapore’s two casinos and the Universal Studios Singapore theme park.

You can learn more about the company in here or catch up with the results from its previous quarter in here.

Financial highlights

The following’s a quick rundown on the latest financial figures for Genting Singapore:

  1. For the first-quarter of 2016, Genting Singapore’s revenue dropped by 5% year-on-year to $608 million.
  2. But, net profit attributable to shareholders was sliced by 83% to end the quarter at just $10.8 million. The profit decline came from lower “other operating income” and much higher “other operating expenses”.
  3. Earnings per share (EPS) was 0.09 cents for the first-quarter of 2016, down from the 0.52 cents seen a year ago.
  4. Cash flow from operations was $271.6 million for the reporting quarter while capital expenditure came in at $18 million. This gave Genting Singapore positive free cash flow of $253.6 million for the quarter, up from the $215.7 million seen in the first-quarter of 2015 ($293.4 million in cash flow from operations and $77.7 million in capex).
  5. As of 31 March 2016, Genting Singapore had $5 billion in cash and equivalents and $1.55 billion in debt. This is an improvement from the $5 billion in cash and equivalents and $1.63 billion in debt that Genting Singapore had at the end of the previous sequential quarter.

In all, Genting Singapore had stumbled out the gate for 2016. Revenue shrank in the first-quarter of the year, albeit at a slower rate compared to the decline last year. Profit, though, was down in a big way. To be sure, Genting Singapore still maintains a healthy balance sheet and had generated positive free cash flow.

Genting Singapore’s trade and other receivables also fell from $646 million at the end of last year to $533.8 million on 31 March 2016. Foolish readers may recall that my fellow Fool Stanley Lim had previously expressed his concern over the size of the company’s trade receivables. The figures have since improved.

Operational highlights

For the first-quarter of 2016, Gaming revenue was again behind much of the decline. Revenue from this segment fell 9% to $450.5 million. Meanwhile, Non-Gaming revenue posted a 9% year-on-year increase to $157 million.

Genting Singapore’s management team included the following commentary on the quarter:

“During the first quarter of 2016, the attractions business achieved visitorship of approximately 1.6 million as Universal Studios Singapore recorded its best first quarter performance since opening, in terms of both revenue and attendance.

We continue to exercise caution with our VIP gaming business. In this connection, we have been prudent in providing for our gaming receivables. Our mass gaming market segment started 2016 on a better note with strong electronic gaming machines performance. We have seen encouraging progress with the implementation of our new marketing strategies to grow the foreign premium mass market.”

There was also updates given on the firm’s development of an integrated resort in South Korea’s Jeju Island:

“In Jeju, South Korea, construction of the Integrated Resort hotels, casino, retail and entertainment segments are progressing well. Construction of the residential plot is at an advanced stage, with sales having commenced in April 2016. We are on track for a soft opening of Phase 1 of Resorts World Jeju in the fourth quarter of 2017.”

At the company’s closing share price of $0.785 on Friday, Genting Singapore traded at over 370 times trailing earnings.

If you'd like to receive investing insights and keep updated on the latest company and stock market news, sign up for a FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock Singapore.

Also, like us on Facebook to follow our latest hot 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 Chin Hui Leong doesn’t own shares in any companies mentioned.