Genting Singapore, the operator of Resorts World Sentosa, has experienced a decline in earnings despite a surge in income during the initial six months of the year. This is attributed to elevated energy expenditures and a newly implemented casino levy.
The organization generated S$6.631 billion (GBP3.993 billion/EUR4.722 billion/USD4.818 billion) in the first half of the year, representing a 19.5% increase from the preceding year.
Gaming income amounted to S$4.752 billion, exhibiting a 7.5% rise. Hotel room income reached S$63.6 million, while revenue from attractions more than doubled to S$69.7 million. Other non-gaming sources contributed S$43.6 million.
Genting Singapore’s governing board stated that the recovery was fueled by robust demand for casino gaming following the COVID-19 outbreak. This was sufficient to counterbalance the difficulties posed by international travel.
The company remarked, “Despite international visitor counts remaining significantly lower than pre-pandemic levels due to restricted flights, elevated airfares, and varying reopening regulations within our region, we have profited from pent-up demand and achieved substantial progress in our recovery during the initial half of 2022.”
Rental income stood at S$6.7 million, but this was the sole area to witness a decline in revenue. Hotel and support services revenue amounted to S$4.4 million, in contrast to nearly zero income in 2021.
Although Genting Singapore saw a rise in income, the expenses associated with sales, including levies on gaming, escalated at a quicker pace, reaching 33.4% or S$463 million. This surge was a consequence of Singapore’s gambling sector restructuring, encompassing the formation of a new regulatory body and a revised definition of illicit gambling.
Consequently, Genting’s overall profit experienced a decrease of 3.8%, settling at S$200.1 million.
Operational expenses also climbed, primarily due to impairment charges, resulting in a 9.4% reduction in operating profit to S$110.2 million. After accounting for financial costs, joint venture earnings, and taxes, Genting Singapore’s net profit amounted to S$84.4 million, representing a 4.3% dip from the corresponding period in the previous year.
As a result, earnings per share also decreased from S$0.73 to S$0.70.
Despite the dip in profitability, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) remained at S$289 million, in contrast to S$256.8 million during the equivalent period in 2021.
Following the conclusion of the quarter, media reports indicated that MGM Resorts had initiated discussions with Genting Singapore regarding a potential takeover. However, Genting refuted these reports.
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