8 Key Takeaways from Genting Singapore PLC’s Latest Earnings Update

As most Singaporeans know, Genting Singapore PLC (SGX:G13) is the company that owns and operates Resorts World Sentosa, an integrated entertainment destination that includes Adventure Cove Waterpark, S.E.A Aquarium, Universal Studios Singapore, a casino, hotels, as well as celebrity chef restaurants. 2017 was a good year for the company as it posted a 7% increase in revenue to S$2.4 billion and a 63% surge in operating profit to S$892 million.

Last month, the group released it earnings update for the first quarter of 2018. Did the company manage to build on its strong momentum? Here are eight key takeaways from its results:

1. Revenue for the quarter surged 15% to S$675.1 million from S$586.6 million the same period last year. Gross profit increased at a faster pace of 32% to S$343.3 million from S$260.9 million. Operating profit grew 8% to S$281.8 million from S$261.5 million.

2. Net profit for the quarter, however, only inched up 3% to S$217.2 million due to higher taxation expense. Diluted earnings per share rose 20% to 1.8 Singapore cents from 1.5 Singapore cents.

3. The group’s management cited broad-based improvement in volume growth in all its major segments. It also attributed a bustling VIP rolling volume in its casino segment as reasons for the improved performance. The non-gaming businesses recorded a 10% jump in revenue with visitor count to its attractions exceeding 18,000 per day on average. It also achieved a high hotel occupancy rate of 94%. If the one-off gain from the disposal of an investment in Korea last year were to be excluded, the gain in net profit would have been an even more impressive 91%.

4. The group ended the quarter with S$9.7 billion in assets and S$2 billion in liabilities. Shareholders equity, therefore, stood at S$7.7 billion, an improvement of around S$200 million from 31 December 2017. Net asset value per share improved 2.9% to 63.6 Singapore cents from 61.8 Singapore cents.

5. The group had S$1.1 billion in debt and S$4.0 billion in cash and equivalents. This gives it a net cash position of S$2.9 billion.

6. Over the quarter, the group reported a net cash inflow of S$303.5 million, with just S$18.4 million in capital expenditures. This translates to a positive free cash flow of S$285.1 million.

7. On the outlook for the rest of the year, the group’s management said:

“As Asia’s most successful premium lifestyle destination resort, we continue to attract premium visitors through a combination of unique and innovative lifestyle events. Premiering in Singapore on 18 May, the Taiwanese theatrical production Super Mommy is a Chinese musical exploring the lives of a multi-generational household struggling to cope with their jobs while caring for their young and elderly family members. This year, for World Cup 2018, RWS will be organizing Football Fever in June/July, where fans can come together to support their respective teams through exciting activities, events and live screenings of football action.”

The line-up of activities will likely be a boost to visitor footfall and revenue for the rest of the year.

8. At the time of writing, shares in Genting Singapore exchanged hands at S$1.26. This translates to a trailing price-to-earnings ratio of 23.4, a price-to-book ratio of 1.98 and a trailing dividend yield of 2.8%.

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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 contributor Jeremy Chia doesn’t own shares in any companies mentioned.