Genting Singapore Remains Profitable Despite Pandemic Impact

In spite of the effects of the worldwide health crisis, Genting Singapore narrowly managed to remain in the black in 2020.

The integrated resort (IR) operator’s income decreased by 57.1% to S$1.06 billion (£579.1 million/€659.7 million/$798.9 million), but cost controls and a rebound toward the end of the year helped it avoid a deficit in 2020.

Genting Singapore’s gambling income dropped by 56.9% to $700.8 million, after its properties were shut down from April 6 to June 30.

Non-gambling income from attractions such as Universal Studios Singapore and the S.E.A. Aquarium (both part of Resorts World Sentosa) declined by 64.8% to $299.4 million.

However, Genting partially offset this decrease with a more than 20-fold rise in non-IR income, reaching $63.5 million. This came from its investment business, as well as other hotels and support services.

While the operator derives almost all of its income from Singapore, $288,000 came from other investments in the Asia-Pacific region.

Genting’s cost of goods sold also dropped by 43.2% to $831.9 million. However, this decline was far less than the income decline, meaning gross profit fell by 76.8% to $231.9 million.

Genting earned $12.4 million in other operating income and $45.5 million in interest income. Its operating expenses were $183 million.

In the year 2019, a reduction of 4% was observed.

Administrative expenses constituted the largest portion of these expenditures, but they experienced a decline of 32% to $131.5 million. Sales and marketing expenses plummeted by 72% to $17.2 million, while other operational costs surged by over 400% to $25.6 million.

This resulted in an operating profit of $115.8 million, a decrease of 87.1%.

Following financial costs (down 80% to $4 million) and joint venture earnings (down 69% to $1.2 million), Genting Singapore’s pre-tax profit reached $113 million, a decrease of 87.2%.

Its total tax liability amounted to $43.7 million, a 72% reduction from 2019. This meant Genting Singapore’s net profit was $69.2 million, down 90.0%.

The operator stated that two-thirds of the profit was attributed to the period preceding the Lunar New Year weekend in late January 2020. After this period, the “rapid outbreak” of Covid-19 in Asia and the subsequent travel and casino restrictions negatively impacted profits.

While the business encountered losses in the initial six months of the year, signs of recovery emerged in the latter half as Resorts World Sentosa reopened and Singaporeans were provided with vouchers to stimulate the country’s tourism sector. However, net revenue in the second half still decreased by 49% to $615.5 million. Meanwhile, net profit in the second half fell by 41% to $185.9 million.

“We are deeply appreciative of the various support measures provided by the Singapore Government,

which aided our resort in navigating the crisis,” Genting Singapore stated.

The COVID-19 pandemic has had a severe impact on our business, despite government assistance and cost-reduction efforts implemented by the group.

This has led to the group’s poorest financial performance since the establishment of the Singapore Integrated Resort in 2010.

The operator stated that, in the near future, international travel is unlikely to reach pre-pandemic levels. However, they expressed their commitment to continuing the $4.5 billion “major expansion” of Resorts World Sentosa and building an integrated resort in Yokohama, Japan, stating their “enthusiasm” about the Japanese government’s initiation of the bidding process.

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