Genting Singapore PLC Posts Strong Profit Growth In Its Latest Earnings Update
Yesterday evening, Genting Singapore PLC (SGX: G13) reported its 2018 third quarter earnings update. As a quick introduction for context later, Genting Singapore runs and owns the Resorts World Singapore integrated resort, one of our Garden City’s tourism landmarks. Resorts World Singapore‘s attractions include one of Singapore’s two casinos, and the Universal Studios Singapore theme park, among others.
Let’s take a quick look at the key points from Genting Singapore’s latest results:
1. Revenue for 2018’s third quarter increased by 1% year-on-year to S$639.1 million. Strong growth of 9% to S$192.8 million was seen in non-gaming revenue, while gaming revenue decreased by 1% to S$445.4 million.
2. Gross profit for the quarter remained flat, coming in at S$305.3 million, while net profit attributable to shareholders rose 46% year-on-year to S$210.4 million.
3. Similarly, Genting Singapore’s earnings per share was by 46% from a year ago to 1.75 cents.
4. A 17% jump in other operating income to S$22.3 million, and a significant 97% decline in other operating expenses to S$1.2 million, led to Genting Singapore’s outstanding profit growth despite its flat gross profit.
5. The integrated resort owner generated operating cash flow of S$248.2 million in 2018’s third quarter while capital expenditures came in at S$54.7 million. This resulted in free cash flow of S$193.5 million, down 53.8% from S$418.7 million a year ago (operating cash flow of S$438.7 million and capital expenditures of S$20.02 million).
6. As of 30 September 2018, Genting Singapore’s borrowings stood at S$1.03 billion while its cash and bank balances stood at S$3.89 billion, giving it a net cash position of S$2.86 billion.
7. In its latest earnings update, Genting Singapore gave the following comments on its outlook and future plans:
“With rising global uncertainties and intensifying competition within the region, we will look to sharpen our marketing focus on the regional premium mass customers by refreshing our facilities and products to enhance their gaming experience. Meanwhile, we will continue to pursue VIP rolling volume with measured credit risk appetite.
On the Japan front, we continue to work steadily towards the expected bidding process for Integrated Resorts (“IRs”) in the second half of 2019 following the establishment of the basic policy for developing IRs. Specific cities have shown interest in having an IR and we have responded to their requests for information, views and comments. Concurrently, we have also engaged in discussions with stakeholders to understand the environment and the localities where such cities are involved.”