Genting posts 5% drop in 2Q earnings to $168.4 mil despite higher revenue

SINGAPORE (Aug 2): Genting Singapore (GENS) saw its earnings fall 5% to $168.4 million for the 2Q19 ended June, from $177.6 million a year ago, on the back of lower other income and higher expenses.

Earnings per share (EPS) slipped to 1.40 cents in 2Q19, compared to 1.47 cents in 2Q18.

2Q19 revenue climbed 14% to $636.8 million, from $560.3 million a year ago.

The increase was due to a 22% rise in gaming revenue to $441.1 million, boosted by a high rolling win percentage in the VIP rolling business segment at Resorts World Sentosa (RWS).

In a filing to SGX on Friday, GENS says its underlying mass gaming business experienced significant declines in the quarter, and would have been further impacted if not for considerable increased spending to tap the regional markets.

Gross profit edged up by 1% to $254.0 million, as cost of sales jumped 24% to $382.8 million.

Other operating income fell 66% to $6.2 million during the quarter, compared to $17.9 million in the corresponding quarter last year.

Administrative expenses grew 9% to $46.6 million, while selling and distribution expenses rose 19% to $15.1 million.

As at end June, cash and cash equivalents stood at $3.64 billion.

The board has recommended an interim dividend of 1.5 cents per share for the period – the same as a year ago – to be paid on Sept 20.

Looking ahead, GENS says the underlying revenue drivers have been impacted by various factors that will continue to affect its business through the rest of the year.

“We maintain our cautious stance on the premium segment as the regional economic environment faces uncertainty and will impact consumer confidence,” it adds.

Nevertheless, GENS will look towards the $4.5 billion mega expansion of RWS to continue to attract various target markets around the region.

In Japan, GENS says it has fully met the application guidelines and qualifying criteria of the Osaka Request-for-Concept (RFC) in connection with the upcoming integrated resort.

The group adds that it has received confirmation that its RFC registration was officially approved by the local government.

Shares in Genting Singapore closed 2 cents lower, or down 2.2%, at 90 cents on Friday before the results announcement.