But Genting Malaysia going strong
A drop in VIP tourism to Singapore has taken a bite of high-roller gaming at Resorts World Sentosa, operated by Genting Singapore Plc. According to Japanese brokerage Nomura, the firm should do better in 2016 in a more stable environment.
The Malaysian firm posted a 62 percent year-on-year decline in third quarter net profit to SGD37.2 million (US$26.2 million), and EBITDA of SGD209.2 million for the three months to September 30, down 18 percent year-on-year. The decline in tourism has also affected mass-market gaming.
According to the Nomura report cited by GGRAsia, Genting Singapore suffered “due to an industry slowdown (Chinese VIPs stayed away) as well as operational weakness, as management scaled back its credit program to suit a weaker customer mix.”
Nomura will continue to rate the company’s stock neutral, reported the Asia Gaming Brief, but the ongoing decline in tourism and troubled economies in nearby Malaysia and Indonesia will take a toll on the jurisdiction.
Genting Malaysia, however, is expected to show earnings growth in 2016 “on the back of robust domestic gaming volume growth,” said Daiwa Securities analysts. They pointed out added that “weakness in the U.K. operations and pre-opening expenses related to Genting Integrated Tourism Plan are mitigating factors.” That plan includes a MYR5 billion (US$1.14 billion) upgrade of Resorts World Genting, which includes a 1,300-room three-star hotel, a new cable car system, a new shopping district, and additional parking facilities. The planned 20th Century Fox World theme park will open in 2017, with 25 movie-inspired rides.
Genting Malaysia was one of just two major listed casino operators in Asia to see annual share prices rise in 2015, GGRAsia reported. Its Bursa Malaysia-listed stocks were up by 8 percent for the year, according to data from investment research firm Morningstar Inc. In November, the firm posted a net profit of MYR326.30 million for the third quarter, up by 22.6 percent year-on-year.
