Genting Quarterly Net Slides 53% With Lower Gaming Revenue
Genting Bhd. (GENT), the Malaysian company which controls casino operators in Southeast Asia, the U.S. and the U.K., said third-quarter profit fell 53 percent as gaming revenue and palm oil prices declined.
Net income dropped to 279.4 million ringgit ($92 million) in the three months ended Sept. 30, or 7.6 sen a share, from 597.2 million ringgit, or 16.2 sen, a year earlier, the company said in a filing to the Kuala Lumpur stock exchange yesterday. Revenue declined 14 percent to 4.2 billion ringgit.
The company posted its third consecutive quarterly drop in profit after its Singapore unit, which runs one of the island- state’s two gaming resorts, reported a 47 percent slump in net income. Genting Singapore Plc plans to open new attractions, including Marine Life Park, on Dec. 7 at its Resorts World Sentosa casino resort in the city-state to boost sales.
“The full opening of Resorts World Sentosa will allow the company to capitalize on sales and marketing initiatives that appeal to a wider base of affluent travelers and new markets,” Genting said in its exchange filing.
Genting Singapore, which opened its casino resort in the city-state at the start of 2010, reported gaming revenue dropped 20 percent in the third quarter as slower economic growth and tighter rules curbed spending by gamblers.
Shares of Genting have declined 18 percent in Kuala Lumpur this year, compared with a 5.2 percent advance in the benchmark FTSE Bursa Malaysia KLCI Index. The stock climbed 2 percent to close at 9 ringgit in Kuala Lumpur, its biggest daily gain since Oct. 1.
Genting Malaysia Bhd. (GENM), a unit operating the only casino resort in the Southeast Asia nation, fell 2.3 percent to 3.42 ringgit. Genting Singapore advanced 2.4 percent to S$1.28 in Singapore trading.
“Genting’s dependency on the volatile Singapore market, which is currently facing some headwinds with the ever-changing government regulations, would be an obstacle to its share price performance in the medium term,” Hoe Lee Leng, an analyst at RHB Capital Bhd., wrote in a report today.
Genting last year got 40 percent of its total revenue from Singapore and another 40 percent from Malaysia, while the U.S. contributed 10 percent and the U.K. accounted for 6 percent, according to data compiled by Bloomberg.
The group said it lost money in the U.K during the quarter, while profit from its gaming business in Malaysia rose 2 percent, according to the statement.
Genting’s plantation division saw profit contributions drop 21 percent to 122.3 million ringgit, it said yesterday. Pretax profit from power generation more than doubled to 73.6 million ringgit.
To contact the reporter on this story: Chong Pooi Koon in Kuala Lumpur at email@example.com