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After Falling For Years, When Will Genting Singapore Ltd See Its Revenue Grow Again?

Genting Singapore PLC (SGX: G13) has seen its business suffer over the last few years, with its revenue falling from S$3.22 billion in 2011 to just S$2.40 billion in 2015.

genting-singapores-revenue
Source: S&P Global Market Intelligence

This is similar to what is happening to the gaming industry in Macau. As of July 2016, gaming revenue in the special administrative region of China has seen continuous declines for 26 months.

But, there are signs of recovering appearing for the world’s gaming capital. According to an article by South China Morning Post, gaming revenue in Macau saw a surprising uptick of 1.1% year-on-year for the month of August 2016. The article indicated that the mass-market segment of the gaming business might be helping to stabilize overall gaming revenue.

Does this also mean improvement in revenue could be near for Genting Singapore?

Genting Singapore’s prospects

The company is still seeing weak performance based on its latest quarterly result – it experienced a 17% drop in revenue.

But, data from the Singapore Tourism Board showed that tourist arrivals to Singapore have been improving. In this year from January to July, there was an 11.5% increase in tourist visits to Singapore when compared to 2015. Most of that increase came from Chinese tourist arrivals, which grew 49.2% over the same period.

The tourism data numbers seem like encouraging news for Genting Singapore. Yet, given that most of the company’s earnings are currently generated from VIP gaming clients (numbers of which have drastically declined in recent years), it is still unclear if any boost from mass market gaming customers would be strong enough to turn the tide around for Genting Singapore.

Moreover, the recent Zika virus outbreak here in Singapore could negatively affect the country’s entire tourism industry although the authorities have said it’s still too early to tell what effects the outbreak will have. This issue is is largely out of the control of Genting Singapore. It seems all the company can do for now is to sit and wait. Investors will have to do the same too.

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