Genting Singapore, the operator of Resorts World Sentosa (RWS), recently announced its financial results for the six months ending on December 31, 2023. Despite facing seasonal challenges, the company showcased remarkable growth in both gaming and non-gaming sectors.
Financial Performance Overview
Genting Singapore reported a substantial year-on-year revenue increase of 26%, reaching SG$1.34 billion for the six months ending December 31, 2023. This growth trajectory persisted, with a 24% surge compared to the preceding six months. Notably, gaming revenues at RWS witnessed a noteworthy 19% year-on-year increment, amounting to SG$900.6 million, reflecting a resilient performance despite the seasonal slowdown in the fourth quarter. Non-gaming revenues also surged impressively by 42%, reaching SG$436.3 million.
Earnings and Profitability
Adjusted EBITDA stood at SG$573.2 million, marking a 13% increase year-on-year and a substantial 27% sequential growth. Net profit for the second half of 2023 reached SG$334.9 million, showcasing a remarkable 31% year-on-year rise. For the full fiscal year 2023, Genting Singapore’s revenues soared by 40% to SG$2.42 billion, with Adjusted EBITDA climbing by 32% to SG$1.03 billion, and net profit witnessing an impressive 80% surge to SG$611.6 million.
Factors Influencing Performance
Despite the overall positive performance, Genting Singapore acknowledged challenges, particularly in the fourth quarter of 2023. Analysts attributed this to various factors, including Singaporeans opting for overseas travel during the year-end holidays, impacting both gaming and non-gaming revenues. Additionally, the company cited challenges such as the strong Singapore dollar, high airfares, and slower recovery in Chinese outbound travel, affecting non-gaming revenue growth.
Analyst Insights and Expectations
Analysts from Nomura described Genting Singapore’s fourth-quarter results as a miss, with EBITDA declining by 34% compared to the previous quarter. Seasonality played a significant role, but analysts also noted one-off items, including higher provisions on trade receivables, impacting performance. However, they anticipate a significant improvement in the first quarter of 2024, driven by strong gaming volumes, the mutual visa waiver between Singapore and China, non-recurring items, and increased tourism due to concerts.
Operational Developments and Future Plans
Genting Singapore is actively pursuing redevelopment and expansion initiatives to enhance its offerings and maintain competitiveness. Ongoing developments, including the Forum Lifestyle zone, Minion Land at Universal Studios Singapore, and the Singapore Oceanarium, are on track for a soft opening in early 2025. The company has issued tenders for a new waterfront development, featuring 700 hotel keys and immersive lifestyle offerings, with returns expected in the second quarter of 2024. Furthermore, renovation and upgrading works across the entire resort are planned in phases, covering existing hotels, food & beverage outlets, attractions, and the casino.
Genting Singapore’s robust financial performance amidst challenges underscores its resilience and strategic positioning in the market. While facing headwinds such as seasonal fluctuations and external factors affecting tourism, the company remains focused on driving growth through innovative developments and operational enhancements. With promising prospects ahead, including upcoming expansions and anticipated improvements in the first quarter of 2024, Genting Singapore is poised for continued success in the dynamic landscape of the hospitality and entertainment industry.