Genting profits triple after sale of power plant

PUBLISHED : Saturday, 02 March, 2013, 12:00am
UPDATED : Saturday, 02 March, 2013, 4:17am

Genting, Southeast Asia's biggest casino group by sales, said fourth-quarter profit more than tripled after booking gains from the sale of a power plant.

Net income surged to 2.48 billion ringgit (HK$6.21 billion) for the three months ended December 31, from 772.9 million ringgit a year earlier. Revenue dropped 7 per cent to 4.49 billion ringgit.

Genting, which has businesses as diversified as plantations and energy, booked a gain of 1.89 billion ringgit after selling a 720-megawatt plant at Kuala Langat in Malaysia's Selangor state.

The higher profit came after three previous quarters of earnings decline on reduced contributions from its core gaming business and lower palm oil prices.

"The global economic outlook appears more positive this year," Genting said in its exchange filing.

Genting shares rose 3.27 per cent to 9.80 ringgit at the close of trade in Kuala Lumpur. The stock has fallen 7.8 per cent over the past 12 months, underperforming a 4.1 per cent gain in the FTSE Bursa Malaysia KLCI Index.

Profit at its Singapore operations halved last quarter after the industry's regulator stifled efforts by casino operators to lure gamblers with discounts and giveaways including free concert tickets. Genting Singapore, which runs one of the island-state's two gaming resorts, plans to open new attractions to boost sales after opening a marine park.

The Singapore subsidiary will achieve a "more steady-state profit margin" as major capital expenditure for the resort tails off in the second half, Genting said. The group also reported lower pre-tax profits at its Malaysian and British casino operations.

Genting "remains a value play," Lucius Chong, an analyst at CIMB Group, wrote in a report released yesterday. "We see Genting as a cheaper proxy to all the key listed units of the group because it currently only factors in the value of its listed units."