Friday 29 Mar 2024
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KUALA LUMPUR: The sharp fall of 64% in Genting Singapore PLC’s net profit will not augur well for its parent company Genting Bhd as the Singaporean subsidiary contributes a large bulk of its earnings.

Singapore-listed Genting Singapore (fundamental: 2.7; valuation: 0.8) yesterday announced that its net profit for the first quarter ended March 31, 2015 (1QFY15) shrank to S$91.73 million (RM248.66 million), or 0.52 cents per share, from S$257.55 million, or 1.87 cents per share, in the previous corresponding quarter, due to the weak premium gaming market.

Revenue declined 23% to S$639.24 million from S$828.83 million a year ago. This poor set of results would weigh on its parent’s performance, which holds a 52% stake in Genting Singapore, said analysts.

In a filing with the Singapore Exchange yesterday, Genting Singapore said: “Our premium gaming business continues to come under stress due to regional environmental factors. We do not expect any respite in the medium term, and are restructuring our operational and marketing organisation to adjust to this change.”

“Additionally, in such circumstances, we have adopted a cautious approach in granting credit in this market segment and will be prudent in providing for our receivables,” said Genting Singapore.

As such, Genting Singapore expects the year ahead to be challenging.

Resorts World Sentosa contributed a revenue of S$638.8 million to the group in 1QFY15.

“Compared with 4QFY14, the adjusted earnings before interest, taxes, depreciation and amortisation increased by 18% as the initiative to remodel the premium gaming business started to see improvements in business margins,” the integrated resort operator said.

“The premium gaming market continued to be weak. During 1QFY15, the attractions business enjoyed a daily average visitation of about 16,000 and the hotel business maintained a high occupancy rate of 93% with a daily average room rate of S$381,” it said.


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. Go to www.theedgemarkets.com for details on a company’s financial dashboard.

 

This article first appeared in The Edge Financial Daily, on May 15, 2015.

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