KUALA LUMPUR (Nov 30): Genting Bhd swung to a third-quarter net loss of RM275.8 million –  its first quarterly net loss in 10 years – versus a net profit of RM190.04 million a year ago, no thanks to an RM1.83 billion impairment loss on its 49.4%-owned unit Genting Malaysia Bhd’s (GENM) investment in the promissory notes issued by the Mashpee Wampanoag Tribe.

"This impairment loss was due to the uncertainty of recovery of the notes following the US government’s decision in September that the Tribe did not satisfy the conditions under the Indian Reorganisation Act that allow the Tribe to have the land in trust for an integrated gaming resort development," said Genting in a filing with Bursa Malaysia today.

The notes were to finance the Tribe’s development of an integrated gaming resort in Taunton, Massachusetts, the US.

"GENM continues to work closely with the Tribe on options which include a legislation being introduced in the US Congress which, if passed, will entail the US government to reaffirm the land in trust for the benefit of the Tribe," said Genting.

"This impairment loss can be reversed when the notes are assessed to be recoverable," it added.

As a result, Genting reported a loss per share of 7.18 sen in the third quarter ended Sept 30, 2018 (3QFY18) compared with an earnings per share of 5 sen for 3QFY17.

Quarterly revenue, however, was up 6.7% to RM5.38 billion from RM5.04 billion a year ago.

The poor quarterly earnings dragged the group's net profit for the cumulative nine months (9MFY18) down 45.9% to RM710.42 million, from RM1.31 billion a year ago. Revenue grew 4.7% to RM15.46 billion from RM14.77 billion in 9MFY17.

On prospects, Genting cautioned that the revision in casino duties and casino license fee in Budget 2019 will impact the GENM’s earnings next year. 

And with rising global uncertainties and intensifying competition within the region, Resorts World Sentosa (RWS) will look to sharpen its marketing focus on the regional premium mass customers by refreshing its facilities and products to enhance their gaming experience.

"RWS will continue to pursue VIP rolling volume with measured credit risk appetite," said Genting.

In Japan, Genting Singapore Ltd (GENS) continues to work steadily towards the expected bidding process for integrated resorts (IRs) in the second half of 2019 following the establishment of the basic policy for developing IRs.

"Specific cities have shown interest in having an IR and GENS has responded to their requests for information, views and comments. Concurrently, GENS has also engaged in discussions with stakeholders to understand the environment and the localities where such cities are involved," said Genting.

Meanwhile, Genting said its 51.55%-owned Genting Plantations Bhd will likely register higher production growth in 4QFY18 due to higher output from Indonesian operations.

For its property segment, the Genting expects an improved year-on-year performance for 2018 despite the soft property market.

"The third phase of Johor Premium Outlets commenced operations in November 2018 and this along with the Genting Highlands Premium Outlets registering its first full year of operations will further contribute to the group.

Genting also said construction of Resorts World Las Vegas is progressing well. The first phase is estimated to cost some US$4 billion and is targeted to open by the end of 2020.

Genting shares were down six sen or 0.95% to close at RM6.28 today, giving it a market capitalisation of RM24.18 billion.