Genting Singapore's core earnings crash 96.3% to $2.2m in Q2

Blame it on weak premium market win rate.

Genting Singapore (GS) is down on its luck, as Q2 core earnings (net of perpetuals as well as unrealised forex and exceptional costs) plummeted a whopping 96.3% YoY to $2.2m.

According to a report by OCBC, low win rate for the premium market dragged down revenue by 16.8% YoY to $480.9m. On a theoretical normalised hold basis, Q2 revenue would have been up 14.9% YoY at $552.9m.

Gross profit margin sank 30.3% in theoretical hold rate basis. Stripping forex costs, Q2 core earnings before interest, tax, dividends and amortization (EBITDA) fell 34.2% YoY to $127.6m.

Moreover, GS saw cost savings from its right-sizing exercise.

"The management announced that one-off right-sizing costs were incurred during the quarter, without specifying the figure. We estimate the right-sizing exercise to have come up to ~S$1.6m in one-off costs for GS for 2Q16, and forecast the same amount in one-off costs for 3Q16," OCBC stated.

"This is expected to be offset by savings of around ~S$7m per quarter for 2H16 and FY17, slightly below the management’s guidance of S$30m/year cost savings," it added.