Genting Singapore Touches Four-Month Low After Quarterly Loss

Genting Singapore Plc, the world’s third-biggest casino company by market value, slid to the lowest in four months in intraday trading in Singapore after posting a fourth-quarter loss on discontinued operations in the U.K.

The shares erased their losses to end unchanged at S$1.98, at the 5 p.m. close in Singapore after declining as much as 5 percent to S$1.88, the lowest intraday price since Oct. 1. The benchmark Straits Times Index fell 0.6 percent.

Net loss widened to S$150.3 million ($118 million) in the three months ended Dec. 31 from S$101.7 million a year earlier, the company said in a statement yesterday. For the full year, Genting Singapore posted a S$37.8 million profit compared with a loss of S$277.6 million a year earlier, missing the S$615 million average of 21 analyst estimates compiled by Bloomberg.

The “gaming market momentum is slowing, we see more competition,” David Ng and Michelle Lee, analysts at Goldman Sachs Group Inc., wrote in a report. “We had expected more growth, given the continued ramp-up, and still novelty factor, but instead, it appears mass could be hitting near-term saturation.”

Genting Singapore and Las Vegas Sands Corp. opened the city-state’s two casino-resorts last year, competing for Asia’s biggest gamblers, after Singapore lifted a four-decade ban.

High Rollers

Genting Singapore’s profit margin narrowed for its VIP business as high-stakes gamblers won more than in the previous three-month period. It also paid down interest on its S$207.9 million loan to finance the property.

The casino operator sustained a full-year loss of S$619 million from the operations it sold in the U.K., with S$242 million of the shortfall booked in the fourth quarter.

“There’s going to be an adjustment period,” said Carey Wong, an analyst at OCBC Investment Research Pte. “There will probably still be some volatility.”

Genting Singapore’s net cash inflow from operating activities of S$298.7 million in the fourth quarter was “pretty good,” said Wong. For the full year, cash flow from operations was S$1.41 billion.

Genting Bhd., the Malaysian company that controls Genting Singapore, lost 0.2 percent to 10.38 ringgit at the 5 p.m. close of trading in Kuala Lumpur.

Roller Coaster

The gambling market for Singapore’s two casinos increased to $4.9 billion in the fourth quarter, 8 percent higher than the previous three-month period, according to the Goldman Sachs report. The growth was slower than the third quarter’s 15 percent expansion and below Macau’s 16 percent growth, Ng and Lee said. They reiterated their recommendation to sell the Singapore company’s shares.

Genting Singapore plans to open a marine museum, a water park and two hotels at its $4.7 billion Resorts World Sentosa property starting from the middle of this year. It reopened the Battlestar Galactica roller coaster at its Universal Studios Singapore theme park this week, after shutting it down for almost a year to fix a “ride component failure.”

“The opening of new attractions, which have begun with Battlestar Galactica, will continue with more openings in the second half of the year,” said Joseph Wong, an analyst at CIMB- GK Securities Pte. “They’ll have a strong pool of new tourists which could potentially turn into casino patronage.”

To contact the reporter on this story: Kristine Aquino in Singapore at kaquino@bloomberg.net.

To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net

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