Friday, May 15, 2009

Genting Singapore posts loss

By Elizabeth Wilmot
Singapore Straits Times

PROFITS shifted sharply into reverse at gaming firm Genting Singapore during the first quarter of the year with the company suffering a net loss of $31.9 million.

The dive into the red - which compares to a net profit of $6 million over the same period last year - was incurred on revenue reduced by 36 per cent to $105.4 million.

The company blamed the net loss partly on derivative financial instruments losses amounting to $6.7 million.

Also cited was a $7.1 million increase in pre-operating expenses for the integrated resort (IR), mainly caused by acceleration of recruitment, training, sales and marketing programmes at the IR prior to its launch.

The group said that the above losses and expense increases were mitigated by higher operating profits of $1.3 million recorded at its UK casinos. This compares to a loss of $1.4 million for the corresponding quarter last year.

The turnaround was down to stringent cost control measures and lower operating overheads put in place by management, despite lower revenue from casino operations.

The group expects Resorts World at Sentosa to increase investment in the IR to $6.59 billion from $6 billion, which will be funded by operating cash flows when the IR opens next year. Construction is said to be on track for the IR's soft opening in early 2010.

Genting warns that pre-opening costs incurred will be significant, with staff and payroll-related costs forming a large part. The group also projects that by IR opening time capital expenditure will be less than $6 billion.

The group made a loss per share of 0.33 cents, compared with earnings per share of 0.06 cents for the same period last year.

Net asset value was 28.98 cents as at Mar 31, compared with 28.41 cents at Dec 31. On Wednesday Genting Singapore's shares rose 0.5 cents to close at $0.755.

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