AnalysisSGX

8 things I learned from the 2021 Genting Singapore AGM

Genting Singapore owns Resorts World Sentosa in Singapore, one of the largest integrated resort (IR) destinations in Asia, offering a casino and the Universal Studios Singapore theme park. Genting Singapore also operates hotels, MICE, leisure and entertainment facilities, and specialty retail outlets.

One of the largest companies in Singapore by market capitalization since its listing on the Singapore Exchange in December 2005, Genting Singapore is also a constituent stock of the Straits Times Index.

As the COVID-19 pandemic brought global travel and tourism to a standstill in 2020, Genting Singapore’s business operations were significantly impacted. At the company’s 36th annual general meeting Tan Hee Teck, President and COO of Genting Singapore, addressed key events, latest developments, and selected key questions submitted before the AGM. Here are eight things I learned from the 2021 Genting Singapore AGM.

1. Genting Singapore’s FY2020 financial performance was severely impacted due to border closures and imposed measures brought about by the COVID-19 pandemic.  The COO restated that the integrated resorts’ vision and objective has always been to attract foreign visitors. He mentioned that before the pandemic, 75% of the company’s business came from foreign visitors. However, in FY2020, visitors were predominantly local. On the positive side, he reported the company’s strong balance sheet will allow it to tide through the pandemic.

2. Genting Singapore will continue to be engaged in the submission process for the Japan IR opportunity. The COO updated that the Yokohama City government published the integrated resort implementation guidelines in 2020 and that the Request for Proposal was issued a couple of months ago with the IR Operator Selection process taking place in August 2021. This will be followed by the municipal government submitting the proposal of the selected operator to the federal government for the IR Area Designation in 2022.

3. Due to the pandemic, Genting Singapore re-imagined its assets with new immersive zones in the aquarium and development of aqua gastronomy to cater to domestic visitors. It also recalibrated its MICE business and held the first hybrid pilot event in Singapore in August 2020. Since the Phase 1 reopening in Singapore in July 2020, contactless transactions, perspex shields, and sanitisation were implemented in Genting Singapore’s casino gaming operations. For its hotels, staggered check-in timings, baggage and key card sanitisation, and regular sanitisation of rooms were carried out. The hotels also observed online advance reservations, virtual queues, and real-time count monitoring to ensure all guests were kept safe when visiting its attractions. 

4. A shareholder asked why the executive chairman’s pay doubled during the pandemic year. The COO explained that was due to a misunderstanding in the disclosure relating to the executive chairman’s remuneration. In the annual report, the executive chairman’s remuneration was stated to be in the range of S$21.25 million to S$21.5 million for FY2020, because it included a portion of a contingent bonus of S$35 million which was treated as an accounting accrual as required by accounting standards. 

However, payment of this bonus is conditional upon Genting Singapore being successful in the bid for the Japan IR. Excluding the accrual, the executive chairman received less than S$5 million as total remuneration for 2020, which is more than a 50% reduction compared to the previous year, and that no payment of this contingent bonus award will be made if the company is not successful in the bid for the Japan IR. 

5. Another shareholder asked about the usage of the SingaporeRediscovers Vouchers and whether Resorts World Sentosa benefited from the campaign. The COO said RWS benefited significantly from the vouchers and that the management will continue to look at the innovative bundling of these packages. The management was also optimistic of developing more innovative and differentiated packages for the upcoming June holidays.

6. A shareholder asked about the pandemic risks for the rest of 2021, and how the company is preparing to handle such risks or the resurgence of COVID-19 cases in Singapore. The COO said that the while the pandemic situation remains unpredictable around the world, the government has been doing a good job in keeping Singapore safe. He mentioned that the opening of Singapore’s borders will be calibrated and that the company will be working with the government for the progressive reopening of its programmes, especially in the MICE sector.

7. Another shareholder asked how the company’s gaming operations, especially the high rollers, could be affected as China appears to be clamping down on cross-border money transfers. The COO shared that the Genting Singapore’s VIP customers do not come from China alone but also from around the region. He said that the company does not see many of these external pronouncements outside Singapore having any effects as the company is compliant to anti-money laundering regulations in Singapore and adheres to the strictest of PMLTF regulations.

8. A shareholder asked if there were any changes to the company’s dividend policy. The COO said that the company will be prudent to balance risks in the next 12 to 24 months and monitor the situation in Singapore and its traditional markets before making any proposed changes. 

The proposed final dividend of one Singapore cent per ordinary share for the financial year ended 31 December 2020 was also approved at the annual general meeting and will be paid out to entitled shareholders on 20 May 2021.

The fifth perspective

Looking ahead, the global travel outlook does not look optimistic. The decline in international travel for the whole of 2020 was 70% and the World Tourism Organization mentioned that global travel will not return to pre-pandemic levels for another two to four years

At the same time, the COO said that Genting Singapore will use this period of reduced activity to explore the redesign of its resorts and build hybrid customer experiences as it prepares for the future beyond the pandemic. The company’s strong cash position will help it weather the pandemic. Its commitment of S$4.5 billion to the refreshment of its resorts is also poised to achieve a better yield per square foot.

During the AGM, it was emphasized that Singapore’s branding of being a safe destination for foreign visitors was important and that the company will continue to work with the government to maintain the strong branding. The company will also take a careful and calibrated approach to re-openings.

With the nationwide vaccination drive in progress, the management is hopeful that in the near future, with reciprocal green lanes and organized travel bubbles in place, that Genting Singapore will be well positioned to welcome foreign visitors.

Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »

Julian Kay

Julian graduated with a Bachelor of Business honours degree in banking and wealth management from the University of College Dublin. He possesses CFA Level I and IBF Level 1 Fund Management qualifications, and was previously in the investor relations industry.

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