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Genting Net Drops After Sales Fall From Casinos to Power

Genting Bhd., which controls Asia’s second-biggest casino operator by market value, said first-quarter profit fell 16 percent after takings from premium customers dropped at its Singapore gaming resort.

Brokerages including OSK Holdings Bhd., Hong Leong Financial Group Bhd. and K&N Kenanga Holdings Bhd. reduced their price estimates for Genting to reflect lower earnings forecasts, according to separate reports today.

“We have toned down our earnings forecast,” Keith Wee, an analyst at OSK, wrote in a report today. “The group reported earnings which were below consensus.”

Net income for the three months ended March 31 declined to 693.6 million ringgit ($219 million), or 18.8 sen a share, from 824.2 million ringgit, or 22.3 sen, a year earlier, Genting said in an exchange filing yesterday. Revenue fell 9.6 percent to 4.4 billion ringgit.

The Kuala Lumpur-based company is the parent of Asia’s second-biggest casino operator Genting Singapore Plc, which earlier this month reported a 33 percent decline in first-quarter profit to S$205.5 million ($160 million). Profit from the group’s plantations division dropped on lower palm oil prices, while earnings from power generation fell on lower plant output in China.

“Lower revenue was recorded from all the business segments except for the property division,” Genting, owner of Malaysia’s only gaming resort, said in the statement.

The group’s plantation division’s profit dropped 28 percent to 98.5 million ringgit. Earnings from power declined 40 percent to 125 million ringgit, the company said.

OSK’s Wee cut his so-called fair value to 11.62 ringgit from 12.30 ringgit, while keeping a buy call. Hong Leong Investment reduced its price estimate to 11.14 ringgit from 11.50 ringgit, while K&N Kenanga trimmed its to 11.69 ringgit from 12.57 ringgit.

Genting was unchanged at 9.99 ringgit at the 12:30 p.m. local-time trading break in Kuala Lumpur, while the benchmark FTSE Bursa Malaysia KLCI Index fell 0.1 percent.

Genting Malaysia Bhd., a gaming unit, slid 3.7 percent to 3.70 ringgit, poised for its largest loss since Feb. 8, after its first-quarter profit slipped 35 percent from a year earlier to 270.7 million ringgit.

Genting Malaysia on Oct. 28 opened a casino at the Aqueduct Racetrack in New York. The unit plans to build the biggest convention center in the U.S., and 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.

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