Genting Singapore hits jackpot in Q2

Genting Singapore hit the jackpot in the second quarter, posting revenue of S$979 million, up from S$120 million in 2009, which was attributed to the contributions of Resorts World Sentosa (RWS).

The company also saw a significant increase in net profit to S$397 million this year from a S$50.7 million loss last year.

Genting said RWS alone contributed revenue of S$397 million in Q2, while earnings before interest, taxes, depreciation and amortisation (Ebitda) stood at S$503.5 million, representing an Ebitda margin of 58 percent.

Daily maximum capacity at Universal Studios Singapore has increased to approximately 8,000 with an average visitor spending S$84, while hotel occupancy at RWS hit 70 percent with an average room rate of S$263.

There also seems to be an increasing number of foreigners visiting RWS. Analysts had previously estimated that Singaporeans accounted for about 40 percent of visitors to the casino. However, in press statement released on Thursday, Tan Hee Teck, president and chief operating officer of Genting, said that the results were “powered by overseas arrivals”.

“The Singapore Tourism Board (STB) has been doing a good job and the whole tourism industry has been on a buoyant spin. Two-thirds of the visitors to the casino, for example, come from overseas. Many of them include Universal Studios Singapore and Voyage de la Vie (RWS's resident theatre show) in their itineraries,” said Mr. Tan.

The performance of the company was “a lot stronger than expected on the topline”, said Carey Wong, an analyst from OCBC Investment Research. “It suggests that the Singapore market is a lot bigger than what people were expecting,” he added.

The launch of Marina Bay Sands (MBS) in Q2 did little to cannibalise clients, noted Mr. Tan. “Let's be honest - within such a small place, gamers tend to flit from one to the other. Hence cooperative competition is benefiting both,” he said.

Genting’s performance in the second quarter appears to put it on track to achieve more optimistic full-year earnings targets.

Though there has been no consensus on the performance of Singapore’s gaming market, total gaming revenue for MBS and RWS have been estimated at around US$3 billion, which suggests that both casinos record S$11 million to S$12 million in combined daily gaming revenue.

According to a DBS Vickers report, the first 45 days of operations of RWS saw a daily gross win of about US$4.9 million, while RWS recorded US$4 million daily for its first 65 days.

While GENS did not disclose its gaming revenue for Q2, its average daily revenue works out to around S$9.45 million based on S$860.8 million total revenue of RWS.