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6 Things to Know About Genting Singapore’s Latest Earnings

Genting Singapore Limited (SGX: G13) reported that net profit for the quarter decreased on the back of a drop in gaming revenue.

The latest report was for first-quarter earnings for the year ending 31 December 2019. Genting Singapore is a Singapore-based regional leisure, hospitality, and integrated resorts developer and owner.

Let’s take a quick look at the results.

  1. Revenue decreased by 6% year-on-year to S$640.4 million. The decrease was due to gaming revenue dropping by 8%, which could not offset the slight growth seen in non-gaming revenue – which was up 1% on the year.
  2. Gross profits came in 16% lower on year at S$289.2 million.
  3. Consequently, net profit attributable to shareholders dropped by 5% over the same period to S$205.5 million.
  4. Earnings per share followed suit, falling 6% year-on-year to 1.70 cents for the quarter.
  5. Let’s look at Genting’s free cash flow (FCF). The gaming conglomerate generated an operating cash flow of S$280 million while capital expenditures came in at S$63.4 million. This resulted in an FCF of S$283.9 million. FCF was lower compared to the previous year when FCF stood at S$1.18 billion (Operating cash flow of S$303.6 million and capital expenditures of S$19.7 million).
  6. As of 31 March 2019, Genting’s borrowings stood at S$936.5 million while its cash and bank balances stood at S$4.24 billion, giving it a net cash position of S$3.30 billion.

The Road Ahead

The company commented on its current quarter and outlook:

“Resorts World Sentosa (“RWS) has embarked on a re-development investment of approximately $4.5 billion re-development investment to expand and transform our world-class integrated resort, delivering new attractions, entertainment and lifestyle offerings from 2020 onwards. Our mega expansion plans will see the addition of two new immersive environments Minion Park and Super Nintendo World added to Universal Studios Singapore providing guests with new rides and experiences. S.E.A. Aquarium will be expanded into the current Maritime Experiential Museum, to be rebranded as the Singapore Oceanarium.

A new Waterfront Lifestyle Complex, that will house two stylish hotels, exciting trendy facilities, and novel food & beverage offerings, will transform the RWS waterfront into an exciting all day, all-night venue. This investment reinforces our commitment to make RWS the leading Integrated Resort destination in the world and will shape the business model for the next stage of growth. Geopolitical frictions continue to cast a cloud of uncertainty for 2019. RWS will innovate its offerings and re-engineer its marketing efforts to broaden the reach and deepen commitment in key target markets.

Universal Studios Singapore debuted its new Universal After Hours programme, with operating hours at our theme park extended until 10 pm on Fridays, Saturdays and selected public holidays. Guests will now have more time to soak in the exciting line-up of activities, including the first-ever Hollywood Dreams Light-up parade. To mark Sesame Street’s 50th anniversary, Universal Studio Singapore hosted the biggest birthday bash in town, Sesame Street 50 Years and Counting Celebration, with fascinating interactive shows and exhibits.

Japan has taken a step towards opening integrated resorts with some cities conducting feasibility studies and the Request-for-Concept (RFC) process to deepen the understanding of Integrated Resorts (“IR”) and engage in dialogues with interested IR operators. The Group is stepping up its efforts and deploying more resources to be seriously engaged in the anticipated competitive bid process. The Request-for-Proposal (RFP) process is expected to be initiated by cities once the Japanese Government officially publishes the National Guidelines. Backed by the solid track record of operating in a highly respected jurisdiction and reinforced by a robust balance sheet, the Group is well positioned to deliver a compelling bid that will showcase a large-scale integrated resort destination which will enhance Japan’s tourism appeal and make significant contributions to its tourism economy.”

Shares of Genting closed trading on Thursday at S$0.95 apiece, sporting a price-to-earnings ratio of 15.16 and a dividend yield of 3.68%.

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Motley Fool writer Esjay contributed to this article. Esjay does not own shares in Genting Singapore.

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