Genting Singapore, a leading integrated resort operator, has announced its full-year financial results for 2022, revealing a remarkable 85.5% increase in net profit. The company’s strong performance was driven by a surge in visitation at its flagship resort, Resorts World Sentosa, following the reopening of international borders amidst the ongoing recovery from the Covid-19 pandemic. While the company acknowledges the challenges posed by Covid-19 recovery and inflation, it remains cautiously optimistic about its future prospects.
Revenue Breakdown:
Genting Singapore recorded total revenue of S$1.72 billion for the year, comprising S$1.22 billion from gaming activities and S$478.0 million from non-gaming sources. Non-gaming revenue included income from hotel rooms, attractions, and other non-gaming offerings. Rental income amounted to S$13.5 million, while hospitality and support services income contributed S$4.8 million to the overall revenue.
Factors Driving Performance:
The reopening of international borders played a significant role in boosting visitation at Resorts World Sentosa, leading to increased revenue for Genting Singapore. The company attributes the rise in visitor arrivals, particularly from key regional markets, to the pent-up demand for tourism and social activities. However, Genting’s executive chairman, Tan Sri Lim Kok Thay, acknowledged the potential challenges posed by ongoing Covid-19 recovery and inflation, which could impact the pace of the company’s recovery.
Financial Highlights:
Cost of sales for the year amounted to S$1.12 billion, reflecting a 51.1% increase compared to the previous year. This figure included costs related to inventories, net impairment on trade receivables, and expenses associated with long-term leases. Despite the rise in costs, Genting Singapore achieved a gross profit of S$601.8 million, marking an 84.1% year-on-year increase.
Administrative costs rose by 15.7% to S$137.3 million, while selling and distribution expenses increased by 52.6% to S$25.0 million. Other operating expenses more than tripled to S$34.8 million. These factors, combined with interest income and other operating income, contributed to an operating profit of S$456.3 million, double the amount generated in the previous fiscal year.
After accounting for finance costs and share of results before joint venture, Genting Singapore’s pre-tax profit remained relatively stable at S$456.7 million. Taxation amounted to S$116.6 million, resulting in a net profit of S$340.1 million for the year. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) reached S$774.1 million.
Outlook and Future Prospects:
While Genting Singapore acknowledges the uncertainties posed by factors such as international flight capacities, border measures, economic uncertainties, inflationary pressure, and manpower challenges, the company maintains a cautious yet optimistic stance. With a focus on building a resilient recovery, Genting Singapore anticipates continued growth in travel and tourism. The company remains committed to adapting to evolving market conditions and capitalizing on opportunities in its pursuit of long-term success.
Genting Singapore’s full-year financial results for 2022 demonstrate its ability to navigate challenging market conditions and achieve significant growth in net profit. Despite rising costs, the company’s revenue streams, particularly gaming and non-gaming activities, have contributed to its robust performance. While Genting Singapore acknowledges the ongoing uncertainties related to Covid-19 recovery and inflation, it remains cautiously optimistic about its future prospects. By leveraging its strong position in the integrated resort industry and adapting to evolving market dynamics, Genting Singapore is well-positioned to capitalize on the recovery of the travel and tourism sector.