World Gaming Insight

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Genting Singapore revenues halved but back to profit in 3Q20

Genting Singapore has announced a profit of SG$54.4 million (US$40.4 million) in the three months to 30 September, down 66% year-on-year but reversing a loss of SG$163.3 million (US$121.2 million) in the previous quarter resulting from the COVID-19 forced closure of Resorts World Sentosa (RWS).

The improved results come despite a significant fall in revenues compared to 3Q19, impacted by ongoing border restrictions that have limited international leisure arrivals. RWS suspended operations in early April as a result of the coronavirus pandemic before reopening some non-gaming outlets in late June and its casino from 1 July.

In a quarterly update published over the weekend, Genting Singapore revealed a 50% fall in revenues to SG$301.0 million (US$223.3 million) including a 74% fall in non-gaming revenue to SG$59.9 million (US$44.4 million). Gaming revenue fell by 41% to SG$212.9 million (US$158.0 million).

While significantly down on 3Q19 results, they did represent a stark improvement over the second quarter of 2020 which saw revenues of just SG$41.3 million (US$30.6 million) and gaming revenue of just SG$6.5 million (US$4.8 million).

Adjusted EBITDA in 3Q20 fell 46% year-on-year to SG$149.0 million (US$110.5 million) but was improved from an Adjusted EBITDA loss of SG$84.9 million (US$63.0 million) in Q2. It was also considerably higher than expected with analysts describing it was a “substantial EBITDA beat“ versus estimates of EBITDA break-even, plus a high EBITDA margin of 53%.

“We suspect there were some one-offs (because, frankly, it is just too strong otherwise), such as positive VIP luck, government subsidy, or some kind of reversal – but even half of what is reported would be still very impressive, and 3Q was a clear beat on both top- and bottom-lines,” said JP Morgan’s DS Kim, Derek Choi and Jeremy An.

“Interestingly, we also note the property EBITDA of SG$145 million (US$106 million) was the highest level among Asia casinos this quarter, and 50%+ above MBS’s US$70 million (which was already a big beat).”

Citing ongoing weak demand as a result of global travel restrictions, Genting Singapore said it has focused instead on reimagining its guest offerings – particularly in the non-gaming space via a range of “staycation” packages for locals combining accommodation with either theme park or restaurant experiences.

It added that S.E.A. Aquarium has “successfully bred new animal residents, some of which are listed as ‘Vulnerable’ and ‘Threatened’ in the International Union for Conservation of Nature Red List of Threatened Species.

“Visitors can admire these newborn inhabitants at the newly opened zone that journeys through three habitats – from the tropical rainforest and intertidal coastal terrains to the coral reef section,” the company said.

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