Genting Singapore PLC (SGX:
G13) is
the owner and operator of one of Singapore’s tourism landmarks, the
integrated resort, Resorts World Sentosa. Among the resort’s many
attractions are one of Singapore’s two casinos, and the Universal
Studios Singapore theme park.
The company reported its 2017 first quarter earnings two weeks ago.
There are both positive and negative takeaways from the
announcement that Shares
investors may
want to learn about. Let’s take a look, starting with an overview
of the numbers:
1. The overall
result
Here’s a table showing some of the important items from Genting
Singapore’s income statement for the first quarters of 2017 and
2016:
![[Image: e0fd2f700197e68b4fa14fcbd02911a1952e7b7d.?1495690239]](https://s3-ap-southeast-1.amazonaws.com/investingnote-production-webbucket/attachments/e0fd2f700197e68b4fa14fcbd02911a1952e7b7d.?1495690239)
Despite experiencing lower revenue, Genting Singapore shares
price managed
to grow its gross, operating, and net profits.
2. The
positives
Firstly, Genting Singapore’s profitability had improved
significantly. This was due to lower impairment of receivables and
better cost management.
Secondly, the company continues to generate a significant amount of
operating cash flow and free cash flow – in the first quarter of
2017, the two cash flow numbers were S$301 million and S$283
million, respectively.
Lastly, there is potential for future growth
as Genting
Singapore is
planning to bid for a gaming license in Japan; the country had
passed a law to legalize casinos only in late 2016. The company has
a strong balance sheet at the moment (S$5.64 billion in cash and
equivalents, and total borrowings of just S$1.08 billion), so that
can provide the resources needed to pursue the Japan
opportunity.
3. The
negative
Despite achieving sequential revenue growth, Genting Singapore’s
revenue in the first quarter of 2017 was down on a year-on-year
basis as mentioned earlier. In fact, both the gaming and non-gaming
segments each experienced a 4% decline in revenue when compared to
the first quarter of 2016 as per Singapore Share
Market News.
In other words, it is important that investors look out for a
sustainable turnaround in Genting Singapore’s revenue before
declaring that the headwinds experienced by the company in the past
few years are behind it.
Source - http://sgtalk.org/mybb/Thread-Learnington-Corner?pid=2234355#pid2234355
Original Source - FoolSG