KUALA LUMPUR: Singapore-listed Genting Singapore Plc swung to a net loss of S$16.93 million (RM48.02 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 yesterday, Genting Singapore said earnings for 2QFY15 was also affected by fair value loss from its portfolio investments that is related to unfavourable market conditions in the 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.

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

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

“However, with cost-cutting measures and the tax refund of S$102.7 million, adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) of RWS was S$300.9 million,” Genting Singapore added.

Genting Singapore 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), Genting Singapore saw its net profit contract 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 was down 23% to S$1.22 billion in 6MFY15 compared with S$1.58 billion in 6MFY14.

Going forward, Genting Singapore 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 [more visits] to RWS,” it added.

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

In Japan, Genting Singapore 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 Genting Singapore.

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

This article first appeared in digitaledge Daily, on August 14, 2015.