Genting Singapore's net profit plunges 83% as operating expenses spike

Genting Singapore's net profit plunges 83% as operating expenses spike

By Ahmad Naqib Idris / theedgemarkets.com   | May 13, 2016 : 6:47 PM MYT

KUALA LUMPUR (May 13): Genting Singapore Plc saw its net profit plunge 83% to S$10.84 million (RM31.91 million) for the first quarter ended March 31, 2016, from S$62.66 million a year earlier, as its other operating expenses spiked 723%.
Revenue for the quarter fell 5% to S$608.01 million from S$639.24 million in the previous year.
The major part of its revenue for the period was derived from Resorts World Sentosa (RWS), contributing a revenue of S$607.7 million, while adjusted earnings before tax rose 11% year-on-year to S$201.2 million.
"This is attributable to the growth in the regional gaming business volume for VIP and premium mass, as well as an improved VIP rolling win percentage.
"During the first quarter of 2016, the attractions business achieved visitorship of approximately 1.6 million as Universal Studios Singapore recorded its best first quarter performance since opening, in terms of both revenue and attendance," said the group.
Based on its financial statements, the group's performance during the quarter was impacted by a 723% spike in other operating expenses to S$53.98 million from S$6.56 million in the previous year.
It also reported significantly lower other operating income, which dropped 84% to S$21.12 million from S$135.04 million, while finance costs jumped 24% to S$14.01 million from S$11.34 million.
Going forward, Genting Singapore said it will continue to be cautious on its VIP gaming business, and said it has been prudent in providing for its gaming receivables.
"Our mass gaming market segment started 2016 on a better note with strong electronic gaming machines performance. We have seen encouraging progress with the implementation of our new marketing strategies to grow the foreign premium mass market," it said.
Meanwhile, it will continue to grow RWS's brand identity, through product repositioning, refurbishment and talent development programmes.
"To kick off the product re-positioning plans, we announced the strategic partnership between RWS, Michelin Guidebook and the wine authority, Robert Parker.
"The partnership created Asia's first Michelin Chef showcase restaurant where customers can savour multiple Michelin-starred chefs' creations through the 'Art at Curate' series that was launched by 3-Michelin-starred chef Massimiliano Alajmo.
"In addition, we launched a brand new Italian restaurant, Fratelli, helmed by 3-Michelin-starred chefs, Enrico and Roberto Cerea," it said.
The group added that the construction of the Integrated Resort hotels, casino, retail and entertainment segments in Jeju, South Korea, are progressing well, while the construction of the residential plot is at an advanced stage.
It said the first phase of RWS Jeju is on track for a soft opening in the fourth quarter of 2017.