Highlight Genting 2Q net profit dips 13% on higher depreciation...

Highlight Genting 2Q net profit dips 13% on higher depreciation...
Business & Markets 2013
Written by Shalini Kumar of theedgemalaysia.com
Thursday, 29 August 2013 19:53

KUALA LUMPUR (Aug 29): GENTING BHD []'s net profit for the second quarter came in at RM466.3 million, a 13% lower than 2QFY12's earnings of RM534.5 million - due to higher depreciation, lower fair value gain on derivative financial instruments and lower gain on disposal of available-for-sale financial assets.

But revenue was RM4.5 billion, up from RM4.3 billion previously.

Revenue from Resorts World Genting in Malaysia was higher in 2Q13 due mainly to overall higher volume of business mitigated by lower hold percentage in the premium players business.

Revenue from Resorts World Sentosa was marginally higher, with the non-gaming business continuing to register a healthy growth compared with 2Q12.

The higher revenue from the leisure and hospitality business in United Kingdom was due mainly to the higher volume of business despite a lower hold percentage of the London casino operations.

Higher revenue from the leisure and hospitality business in the US was contributed by the higher volume of business in Resorts World Casino New York City.

Meanwhile, the lower revenue from the PLANTATION [] division was due to softer palm product selling prices despite the higher fresh fruit bunch production.

The property division’s higher revenue and earnings before tax in 2Q13 were due mainly to robust property sales from the Genting Plantations Berhad group.

For the six months ended June 30, the group brought in RM864.1 million in earnings on the back of RM8.6 billion in revenue.

"Profit before tax in 1H12 included a gain on disposal of subsidiaries of RM174.3 million. In addition, the group had a share of net loss in joint ventures and associates in 1H13, as well as higher depreciation charges during 1H13," said Genting in a press statement today.

Looking ahead, Genting said its performance over the rest of the year would be influenced by a number of factors.

For Genting Malaysia (GenM), the group has announced plans to upgrade its outdoor theme park in a tie-up with 20th Century Fox. Commencing Sept 1, the outdoor theme park will be closed to facilitate the upgrading. The closure is not expected to materially affect the overall Malaysian performance.

"With Singapore’s tourist arrival numbers projected to slow down due to keen regional competition for the same tourism pie, Resorts World Sentosa (RWS) is enhancing its resort offerings to stay relevant and differentiated," said Genting.

Genting Singapore PLC will be opening a new hotel in the Jurong Lake District, with a planned 550-room capacity to "help to grow RWS’s revenue and add to its hotel room inventory that will support its resort gaming and nongaming businesses".

In the UK, the progress of CONSTRUCTION [] of Resorts World Birmingham is well underway and should be opening in 2015.

Resorts World New York's continual marketing efforts are set on attracting more visitations and deliver enhanced awareness of the Resorts World
branding. Resorts World Bimini in the Bahamas commenced operations on June 28.