Genting profit drops 5.2 pct in 2Q19

Despite posting a double-digit revenue increase, Genting Singapore’s profit was down 5.2% to €109.9 million during the second quarter.

Singapore.- The second quarter of 2019 was bittersweet for casino company Genting Singapore. Profit dropped 5.2% to €109.9 million, even as revenue was 13.6% higher year-on-year.

In a recent filing, the company revealed revenue of €636.8 million, but Genting’s profit was still down. EBITDA rose as well by 10.7% year-on-year to approximately €192.2 million. Gaming revenue of €288 million was also up 21.7%.

“Favourable rolling win percentage in VIP gaming business largely drove the group’s revenue and adjusted EBITDA,” Genting Singapore said. All details were revealed in a filing to the Singapore Exchange.

Genting’s profit decline would’ve been higher “if not for the high rolling win percentage in the VIP rolling business segment” at Resorts World Sentosa. “On a hold-normalised basis, the group would have generated an adjusted EBITDA of approximately SGD230 million, a decline of 20 per cent,” the company added.

Company ratings

The credit rating for Genting Singapore remained unchanged despite a major expansion, Fitch Ratings said. The €2.9 billion process to improve non-gaming attractions will only have a modest impact on its leverage and earnings.

“Genting’s leverage will be higher than our previous expectations and the gaming tax in Singapore will increase in 2022 by about 3%,” they said. “However, Fitch believes that Genting has the liquidity, leverage and free cash flow capacity to fund the development within its current rating.”

Furthermore, opening the Resorts World Las Vegas in late 2020 will help them to return its leverage to about 1.0x. According to the firm, that’s commensurate with its A- rating.