Genting Singapore could turn to aggressive credit offerings to lure VIPs
The group had successfully expanded its VIP customer base over the past few quarters.
Lady Luck was with Genting Singapore in Q1 as profits jumped 20% to $217.19m, supported by "bustling VIP rolling volume" in the Lunar New Year and high non-gaming revenue. RHB Research noted that the company is now looking to grow its VIP business further to capitalise on the favourable macro environment.
"This may involve being more aggressive on credit offerings to entice high rollers within the region," it said in a report. "The group had successfully expanded its VIP customer base over the past few quarters. The credit allowed per head meanwhile remains largely unchanged."
"We laud this move which, in our view could help limit its exposure to individual accounts whilst at the same time propel growth going forward," the firm said.
Meanwhile, OCBC Investment Research analyst Carmen Lee said the group has room to pursue a looser credit policy. "Recall that the impairment charge for trade receivables was only $48.3m in FY2017, compared to much higher levels of $235.1m in FY2016 and $270.7m in FY2015," she said.
Separately, Lee looks forward to events for its non-gaming segment such as Football Fever in June/July as well as the theatrical production Super Mommy in May. "We also expect 2018 and 2019 to be positive for the wider hospitality sector in Singapore, as the addition of new hotel rooms slows down," she added.
Genting Singapore said it enjoyed visitations that exceeded 18,000 across its attractions. “Our attractions business, in particular, Universal Studios Singapore and S.E.A. Aquarium experienced higher visitorship and an increased average spend, as compared to the same period last year,” the company said.