Genting's losing streak finally ends as visitor arrivals bounce back

But wil bad VIP debts derail its recovery?

Integrated resort operator Genting Singapore may be finally out of the woods, after its struggling gaming business showed promising signs of life in the first quarter.

Genting has suffered a series of losses in past quarters, mostly due to weak gaming demand and higher loan impairments for non-performing VIP loans. In the first quarter, however, Genting managed to eke out a net profit of $10.8m, compared to a loss of $7.8m in the fourth quarter.

"We continue to believe that the worst is likely over for Genting Singapore, as its VIP gaming segment is showing signs of stabilising," RHB Research said in a report.

Analysts believe that the group's operations have finally stabilised. Average daily rolling volume for the VIP segment rose 4% quarter-on-quarter, while gross gaming revenue market share rose to 58% on back of a better win rate of 2.9%. In contrast, Marina Bay Sands' win rate stood at just 1.4%.

"[First quarter] performance confirmed our view that Resorts World Sentosa (RWS) has seen a bottom in its VIP gaming segment. We continue to expect rolling chip volume to stabilise around current levels," a report by CIMB noted.

Non-performing VIP debts have been a key concern for Genting in past quarters, but analysts reckon that impairment charges will decline this year on back of better credit collection policies.

Genting implemented a new credit collection policy in March, with credit being extended for only 30 days as opposed to 90 days previously.

"We expect to see improvements in the quality of its books for the rest of the year, owing to the group’s more selective credit offerings and with its credit period shortened to 30 days effective March,” RHB noted.