SINGAPORE

Genting outshines Marina Bay Sands in Q4

It was a tale of two resorts in Singapore over the last reporting quarter, with Genting Singapore, the former market laggard, outperforming its rival Marina Bay Sands on almost all metrics.

Marina Bay Sands, owned by Las Vegas Sands, said its adjusted property EBITDA fell almost 21 percent in the quarter, while its overall revenue fell 17 percent. Gaming revenue eked out a 4.4 percent gain.

The company said performance at the iconic resort had been affected by weak VIP revenue. Rolling chip volume was down almost 14 percent on a win rate of 2.79 percent compared with 3.95 percent in the same period the prior year. Its non-rolling chip drop fell 6.2 percent.

Genting Singapore on the other hand reported that its focus on marketing to the premium mass segment had paid off. The operatorof Resorts World Sentosa has now rebounded after getting bad debts that crippled profits two years ago under control.

It posted a 12 percent gain in Q4 net profit, saying that over the year it had seen an encouraging performance in both gaming and non-gaming business.

For Q4, net profit came in at S$150 million ($111 million). Revenue gained 15 percent to $664.7 million. Revenue from gaming during the quarter jumped 20 percent to $444 million.

For the full year Genting, which operates the Resorts World Sentosa property in Singapore, said profit gained 28 percent after stripping out a one-off gain from the prior year from the sale of its stake in an IR in South Korea.

That said, analysts at Bernstein Research were unimpressed, saying the result was below its expectations.

Singapore’s two IRs, although highly profitable, have struggled to boost topline growth in a highly regulated market.

“Higher VIP volumes (+10 percent y/y) are likely being driven by more credit extension. We are concerned about the increase in bad debt provision, and don’t buy management’s downplay - saying it’s only a “blip” from quarter to quarter and the company is maintaining same credit extension level,” they said.

Resorts World Sentosa hosts the Universal Studios theme park, as well as a large aquarium. The company said it had seen average daily visitation of more than 21,000 to its attractions and an increase in visitor spending.

Commenting on the prospects for 2019, Genting said it was “cautious about the ambiguous economic environment and ongoinggeopolitical friction that is clouding the growth of the Asian gaming and tourism market.”

Singapore’s two IRs, although highly profitable, have struggled to boost topline growth in a highly regulated market, with few opportunities for further expansion.

Maybank Research says ideally MBS would like to invest more in Singapore, with both its mall and hotel operations still reporting healthy growth of just over 8 percent.

“MBS would like more hotel rooms to house more premium mass market gamblers and more slots and electronic table games for grind mass market gamblers,” it said in a note, adding that its Q4 results were not all bad.

Singapore saw strong growth in visitation in 2018, suggesting there would be healthy demand for more hotel accommodation. Marina Bay Sand’s hotel occupancy rates during the quarter were at 95.5 percent, with an average daily rate of $423.

Visitor arrivals to Singapore hit a record 18.5 million in 2018, clocking a 6.2 percent increase from the previous year, according to data released by the Singapore Tourism Board.

This was driven by double-digit growth in visitor arrivals from India, USA, Vietnam, and the United Kingdom.

The visitor increase translated into only a modest increase in tourism spending, with receipts up one percent year-on-year to S$27.1 billion, according to preliminary estimates.

There was an increase in the sightseeing, entertainment, and gaming spending, up 6 percent year-on-year, however, there was a drop in spending on shopping (down 14 percent), accommodation (down 5 percent) and F&B (down 4 percent) in the year.

India, Indonesia and, China registered the highest growth when it came to spending.

For 2019, STB forecasts tourism receipts to be in the range of S$27.3 to S$27.9 billion (+1 to +3 percent) and international visitor arrivals to be in the range of 18.7 to 19.2 million (+1 to +4 percent).

Singapore couple fined $826,000 for illegal gambling

A Singapore couple were ordered to pay S$$1.3 million (US$826,000) in restitution for leading a non-licensed betting service that involved the 4-D lottery, local media reports.

The authorities found that 60-year-old Heng Ee Howe had been involved in the illegal activity for as long as 15 years along with his wife, 55-year-old Tin Suh Chyong. Heng had been collecting illegal 4-D bets on behalf of other individuals.

He would then consolidate the bets and send them to gambling runners in Malaysia. He received commissions based on a percentage of the total amount of bets that were collected, as well the winnings of the gamblers.

CRA renews Resorts World Sentosa’s license

The Casino Regulatory Authority of Singapore has renewed the casino license of Resorts World Sentosa for a period of three years. The regulator in its announcement said the renewal was given the go-ahead after assessing that Resorts World Sentosa had fulfilled the requirements set out in the law covering casinos.

Malaysian brokerage RHB Research announced it is maintaining its “buy” call on Genting Singapore, due to its potential Japan expansion and its upcoming reinvestment into RWS.