Your 60-Second Guide to Genting Singapore (SGX: G13) Shares

In this series, we feature one Singapore-listed company each time as a quick guide to everything you should know about it in 60 seconds.

In this instalment, we have Genting Singapore Ltd (SGX: G13), one of two casino operators in Singapore. Previously, we looked at Singapore Technologies Engineering Ltd (SGX: S63).

What’s Genting Singapore’s Business About? 

Genting Singapore is the owner-operator of Singapore’s first integrated resort, Resorts World Sentosa.

The resort offers attractions such as a casino, one of the world’s largest oceanariums, South-East Asia’s only Universal Studios theme park, hotels, and many more.

The majority of Genting Singapore’s revenue comes from the gaming segment, with the remaining coming from non-gaming sales (such as hotel rooms and attractions) and others.

Genting Singapore’s Financial Highlights 

Now, let’s explore how Genting Singapore performed financially from 2015 to 2019 (the company has a 31 December year-end):

Source: SGX StockFacts

Over the last five years, Genting Singapore’s revenue has just inched up by 3% in all.

As for its bottom-line, it has been flat from 2017 to 2019. The company is likely to see a hit in net profit in 2020 if the Covid-19 pandemic continues lingering (more on that later).

In terms of free cash flow, Genting Singapore has performed poorly. This metric had fallen from S$1.09 billion in 2015 to S$838.6 million in 2019.

Free cash flow is money that companies use to reinvest into their business, buy back their shares, pay dividends, or pare down debt.

As of 31 December 2019, Genting Singapore’s balance sheet was strong. It had S$3.95 billion in cash and cash equivalents and S$260.65 million in total borrowings.

Genting Singapore’s Dividend History

Genting Singapore has delighted shareholders by dishing out higher dividends over the past five years:

In all, Genting Singapore’s total dividend per share has grown by 167%.

Major Risk for Genting Singapore to Take Note Of

A key short-term risk for Genting Singapore right now is the headwind from the Covid-19 spread.

On 17 March 2020, the company provided an update on its outlook for the year.

Genting Singapore said that with the continuing spread of COVID-19 around the world and travel restrictions imposed by many governments, Resorts World Sentosa has seen a “significant decrease in visitor attendance and correspondingly revenue, across all its facilities, including our attractions, hotels, restaurants, MICE [meetings, incentives, conferences and exhibitions] facilities and the casino”.

It added the following:

“While the extent of the impact on the Group’s financial performance and operations for the full year 2020 cannot be determined at this stage as the duration and extent of the spread of COVID-19 is uncertain, the Board wishes to issue a profit guidance note that the Group expects that its financial results will be significantly and adversely impacted for the first quarter ending 31 March 2020 and the half year ending 30 June 2020, as compared to the corresponding periods in the previous year.”

Potential investors in the company should take note of this risk and determine if the short-term risk will have an impact on the long-term business prospects of Genting Singapore.

Genting Singapore’s Share Price and Valuation

Since the start of the year, Genting Singapore’s share price has fallen around 26% mainly due to fears surrounding the Covid-19 outbreak.

Right now, at Genting Singapore’s share price of S$0.68, it has a price-to-earnings (PE) ratio of 12 and a dividend yield of 5.1%.

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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock.