Genting Plans Special Dividend Even as Quarterly Profit Falls

Genting Bhd., the flagship company of Malaysian gaming billionaire Lim Kok Thay, proposed a 50 sen special cash dividend even as second-quarter profit dropped.

Net income for the three months ended June 30 fell 13 percent to 466.3 million ringgit ($141 million), or 12.62 sen a share, from 534.5 million ringgit, or 14.47 sen, a year earlier, the company said in a filing to the Kuala Lumpur stock exchange today. Revenue increased 3.4 percent to 4.46 billion ringgit. Genting also plans to sell one warrant for every four shares held at 1.50 ringgit apiece, it said.

The special dividend is the company’s first since it paid 30 sen a share in 2007, according to data compiled by Bloomberg. The Genting group of companies has been investing to expand abroad, from the Bahamas to Manila, amid restrictions on gaming back home in Muslim-majority Malaysia, where it operates the country’s only casino on a hilltop.

“The proposed special interim cash dividend will enable shareholders to derive a return from the profits earned,” Genting said in a separate exchange filing.

Genting Plantations Bhd., the group’s palm oil arm, also proposed a special cash dividend. It plans to pay 44 sen per share and issue one warrant for every five shares held, the unit said in a separate statement.

Genting fell 0.2 percent to 9.18 ringgit in Kuala Lumpur today, while Genting Plantations dropped 0.8 percent to 8.93 ringgit ahead of the announcements. The FTSE Bursa Malaysia KLCI Index closed 1 percent higher.

Monitoring Japan

Genting Malaysia Bhd., another of Lim’s five listed companies, said last month it will spend at least 3 billion ringgit over five years to upgrade its Malaysian resort. It will add 1,300 hotel rooms and spend 400 million ringgit transforming its theme park after signing a licensing agreement with Twentieth Century Fox Consumer Products, the billionaire said.

The subsidiary opened a casino at the Aqueduct Racetrack in New York in October, controls casino operators in the U.K. and owns Resorts World Sentosa, one of Singapore’s two gambling resorts.

The group’s Singapore unit “is monitoring the developments on the passing of gaming legislation in Japan and is prepared to invest in an integrated resort in Japan when the opportunity arises,” it said. Plans are underway to open a resort in Birmingham in the U.K. in mid-2015, Genting said.

The lower profit was partly due to higher depreciation, and lower fair value gains on derivative financial instruments, the company said. Genting booked a loss on its joint ventures and associate companies during the period compared with a profit a year earlier, it said.

Pretax profit from the group’s plantation division fell 40 percent to 55.8 million ringgit from a year earlier, while earnings from power generation climbed 23 percent to 57.5 million ringgit, the company said.