KUALA LUMPUR (Aug 13): Singapore-listed Genting Singapore PLC (GENS) swung to a net loss of S$16.93 million or 0.14 Singapore cents loss per share for the second quarter ended June 30, 2015 (2QFY15), due to the downturn of the gaming industry in Asia.

It posted a net profit of S$102.29 million or 0.84 Singapore cents earnings per share a year ago.

In a filing with the Singapore Stock Exchange today, GENS said earnings for 2QFY15 was also affected by fair value loss from its portfolio investments that is related to unfavourable market conditions in gaming industry.

"As of this quarter, this portfolio has been significantly reduced, with realised net gains over the lifetime of these investments," the gaming group said.

Revenue for 2QFY15 fell 23% to S$578.15 million from S$751 million in 2QFY14.

GENS said Resorts World Sentosa (RWS) contributed revenue of S$577.8 million in 2QFY15, a drop of 23% year-on-year.

It blamed the revenue contraction to the unfavourable global VIP premium business and rolling win percentage, causing a year-on-year decrease in gaming revenue of 28%.

"However, with cost cutting measures and the tax refund of S$102.7 million, adjusted earnings before interest, tax, depreciation and amortisation (ebitda) of RWS was S$300.9 million,' GENS added.

GENS is a 52%-owned unit of Genting Bhd. The poor 2QFY15 results does not augur well for the parent company.

For the cumulative six months (6MFY15), GENS saw its net profit contracted by 86% to S$45.74 million or 0.38 Singapore cents per share from S$330.78 million or 2.7 Singapore cents per share in 6MFY14.

Revenue down 23% to S$1.22 billion in 6MFY15 compared with S$1.58 billion in 6MFY14.

Going forward, GENS said the gaming industry remains weak.

"We maintain a cautious approach in granting credit under this market condition and continue to focus on the foreign premium mass and mass market segments in the region," it said.

"The opening of our new 557-room hotel, Genting Hotel Jurong in the bustling commercial area of Jurong Lake District has been well received and occupancy has been encouraging. Genting Hotel
Jurong will play an important role in our strategy to drive greater visitation to RWS," it added.

GENS also said construction work for Resorts World Jeju in Jeju, South Korea is progressing as scheduled.

"Soil works is expected to be completed before end of this year and building works is targeted to commence early next year, subject to relevant approvals from the Jeju authorities," it said.

In Japan, GENS said management is preparing for the potential passage of the Integrated Resort Promotion Bill, which has been submitted to the national legislature.

"We are encouraged to note that there are signs of more broad based support for this Bill.

"With the group’s financial strength, we continue to look for good investment opportunities within our core competencies in gaming, hospitality and leisure industries," said GENS.

Shares in GENS (fundamental: 2.55; valuation: 0.8) closed to a five-year low of 79 Singapore cents today, down 2 Singapore cents or 2.48%, for a market capitalisation of S$9.46 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)