Despite falling earnings and increasing competition, Genting Singapore remains highly profitable, and a “cash cow”, said executive chairman Lim Kok Thay in an interview with Singapore’s The Business Times.
Lim said the company’s bad debts were under control, and the opening of Genting’s integrated resort on Jeju Island next year will boost earnings.
Recently, the South Korean national government rejected a call for higher taxes in Jeju, which spells additional good news for Genting, which plans to open Resorts World Jeju in late 2017.
Genting’s Resorts World Singapore has seen a slump in earnings over the last few years. Last quarter, the operator saw net profit down 83 percent year on year to S$10.8 million (US$7.9 million), due to higher foreign exchange loss, higher bad debt provisions, finance and other costs.
Results were below analyst expectations, due to “owing to greater-than-expected bad debt provisions”, said Union Gaming.
“Of course, if fewer people are visiting us, you would expect to make less. But if we can maintain our margin, which is fairly attractive, I think the company should be okay. If it’s a cash cow, it’s okay to be stagnant,” Lim said. However, the chairman noted the window of opportunity was narrowing with increasing competition – both legal and illegal.
Lim said he remains optimistic about the Jeju project.
“I think gaming has already been oversold as can be seen by the Macau situation but having said that, of course, there are opportunities such as Jeju. Let’s see what Jeju brings for Genting Singapore,” said Lim.