Genting Singapore’s Earnings in Q3 Beat Expectations and Surpassed Pre-COVID Profits

November 14, 2023

Here’s something exciting for investors to take note of: Genting Singapore Limited (SGX: G13) has really outdone itself this quarter! Their adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA), which is really a fancy way of saying their profit before certain expenses, reached S$345.4 million in Q3 2023.

This is not just better than what experts predicted, but it is also way higher than their pre-COVID profits of S$278.0 million. Impressive, right?

What is even more remarkable is that Singapore’s tourism has not fully bounced back yet—it is at about 77% of its pre-Covid levels. Despite this, Genting Singapore’s performance suggests they could consistently earn around S$300 million each quarter moving forward.

With so much excitement, let us break down their earnings and take a look at some of the key metrics.

1. Mix of strong sales and better profit margins

For the nine months of the financial year 2023 (9MFY2023), their adjusted earnings hit S$797.8 million, a whopping 49.7% increase from the previous year. This success comes from a mix of strong sales and better profit margins, especially in Q3.

2. Gaming business surpassed pre-COVID level

Now, focusing on their gaming business, which includes things like casinos, they’re really raking it in. In fact, their gaming revenues have shot up to S$459.6 million, a 20.3% increase from before Covid hit. This is due to the exceptional performance of both their VIP and regular gaming areas.

3. Non-gaming business is also thriving

Their non-gaming businesses, like hotels and entertainment, are almost back to their pre-COVID levels, too. They made S$230.1 million this quarter, nearly matching their earnings before the pandemic. Thanks to more tourists and the opening of Hotel Ora in May, things are looking up in this area as well.

4. Enhancing its services for the high-end market segment

Genting Singapore is not just sitting back and enjoying this success. They are actively working to make their offerings even more premium, which seems to be a smart move. Even with fewer tourists, they are making more money, showing that they’re attracting wealthier visitors. They are planning to invest S$6.8 billion over the next eight years, aiming to stay ahead in the ever-changing tourism landscape in Singapore.

5. Attractive valuation with dividend yield of 4.1%

With a forward dividend yield of 4.1%, Genting Singapore is trading at an attractive valuation that is suitable for long-term investors. Upside risk include a potential higher dividend payout given the improved financial performance.

Strong signs of growth and resilience

Overall, Genting Singapore is showing strong signs of growth and resilience, even in the face of ongoing challenges in the tourism sector. For investors looking for a promising opportunity, Genting Singapore’s recent performance is definitely worth your attention.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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