Feb. 29 (Bloomberg) -- Genting Bhd., which controls Asia’s second-biggest gaming company by market value, said fourth-quarter profit jumped 66 percent, with maiden revenue contributions from its New York City casino.
Net income surged to 772.9 million ringgit ($258 million), or 20.94 sen a share, for the three months ended Dec. 31, from 465.4 million ringgit, or 12.57 sen per share, a year earlier, the company said in a filing to the Kuala Lumpur stock exchange yesterday. Revenue climbed 24 percent to 5.06 billion ringgit on increased takings at its core Singapore, Malaysia and U.K. casinos and gaming resorts.
“The growth in the global gaming industry in 2011 was driven by key Asian markets,” the group said in its statement. “The economic challenges in Europe and the U.S. continue to cloud the short-term outlook of the Asian economies. Uncertain economic climate also presents some potentially attractive investment opportunities” for Genting Singapore Plc, it said.
The Kuala Lumpur-based group is extending its overseas reach from its roots as owner of Malaysia’s only casino resort. It opened a casino at the Aqueduct Racetrack in New York City last quarter, where it also plans to build the country’s biggest convention center. Its Genting Malaysia Bhd. unit has also pitched proposals for a $3.8 billion casino-and-hotel project in Miami. It’s already the U.K.’s biggest casino operator and owns Resorts World Sentosa, one of Singapore’s two gaming resorts.
Genting rose 0.6 percent to 10.60 ringgit at 11:15 a.m. in Kuala Lumpur trading, tracking a similar gain in the FTSE Bursa Malaysia KLCI Index. The stock has fallen 3.8 percent this year and trades at about 13 times estimated earnings, compared with the 21-times average for 16 gambling operations companies worldwide tracked by Bloomberg.
“Genting is the cheapest gaming stock in the world with resilient base earnings from gaming, plantation and power segments,” Yee Mei Hui, analyst at HwangDBS Vickers Research Sdn. wrote in a note to clients today. She kept a “buy” rating on the stock with 13.70 ringgit price target.
Genting was upgraded to “buy” from “hold” at Hong Leong Financial Group Bhd. as its 2011 profit was better than expected, analyst Low Yee Huap wrote in a report. Credit Suisse Group AG raised the stock’s price target to 13.70 ringgit from 13.30 ringgit previously.
Profit was boosted by the reversal of a previous 308.6 million-ringgit impairment loss, Genting said. The group booked operating revenue of 95.3 million ringgit from its New York City casino, which marked its debut on Oct. 28.
“Resorts World Casino New York City’s performance has been encouraging since its initial opening,” Genting said.
The company has expanded into businesses that include palm oil and power generation to cushion swings in casino takings.
Genting’s plantations division saw profit contributions drop 13 percent to 124.1 million ringgit on lower product prices and higher costs. Pretax profit from power increased 3 percent to 157.1 million ringgit on higher energy tariffs in Malaysia and China, the company said.
-- Editors: Barry Porter, Garry Smith
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