KUALA LUMPUR: Genting Singapore Ltd’s management is cautious over the Singapore market in 2019 given the uncertainty of the economic environment although business volume has improved for nearly two years.

“Going forth, the sustainability of business volume remains the key in the midst of an uncertain economic condition,” said Kenanga research in a Friday note.

The research house said that despite Genting Singapore’s 4Q18 earnings coming in weaker quarter-on-quarter, likely due to provisioning, the resilient business volume indicated that the recovery is sustainable.

Kenanga maintained its recommendation on parent company Genting Bhd as outperform with a price target of RM7.55 a share, pending the release of its own 4Q18 results next week.

In an announcement yesterday, Genting Singapore’s FY18 results came in within expectations, hitting 97% of consensus estimates.

According to Kenanga, the gaming company’s 4Q18 core profit rose 3% from S$148.6mil, on the back of a 10% hike in VIP volume to about S$6.05bil with market share expanding to 47% from 41% while rolling chip win improved to 3.4% from 2.7% previously.

However, Genting Singapore posted weaker sequential results with 4Q core earnings contracting 28% to S$152.3mil while revenue rose 4% due to higher opex, which Kenanga attributes to provisioning.

On outlook, Kenanga noted there are 17 international integrated resort (IR) operators interested in bidding for one of the three IR licences in Japan.

Genting Singapore registered companies in Osaka and Yokohama in Japan and raised JPY20bil of Samurai Bond in October 2017.

“For now, it is still too early to gauge the potential outcome of the bidding process which expected to take place in 2H19,” said Kenanga.