Genting Drops to Four-Year Low as Profit Slumps: Singapore Mover

Genting Singapore Plc fell to its lowest in more than four years after Southeast Asia’s largest casino operator posted profit that missed analyst estimates.

The shares dropped 2.4 percent to S$1.015 at the close in Singapore, the lowest since June 2010. The benchmark Straits Times Index slipped 0.3 percent. Genting said yesterday third-quarter profit slumped 50 percent to S$97.4 million ($75.5 million) from a year earlier as gaming revenue declined. The company was expected to post a net income of S$138.8 million, according to the average estimate of five analysts in a Bloomberg survey.

“The Singapore gaming market is declining at a much faster pace than what the street is estimating,” Somesh Agarwal, an analyst at Macquarie Group Ltd. in Singapore, wrote in a note dated yesterday. “We struggle to see any growth in profits.”

Macquarie, which rates the stock underperform, reduced its earnings estimates for Genting Singapore by 5 percent for each of the next two years and cut its share-price forecast to S$0.95 from S$1. That’s the lowest price target among the 17 brokerages that cover the company, data compiled by Bloomberg showed.

Genting has fallen 32 percent this year to lead declines on the benchmark Straits Times Index as casino revenues tumbled due to a slump in visitors from China, its biggest market. Third-quarter gaming revenue fell 21 percent to S$477.3 million, the company said.

“We are reluctant to upgrade our rating as visibility to future growth remains low,” Richard Huang and Aaron Fischer, analysts at CLSA Asia-Pacific Markets in Hong Kong, wrote in a note dated yesterday. The brokerage maintained its underperform rating and reduced its share-price forecast to S$1.10 from S$1.15.

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