Genting Singapore expects profit decline in 15Q2

Tuesday 4th of August 2015

Genting Singapore announced that it expects to report a significant decline in net profits after tax for 15Q2.

“This is due mainly to fair value loss on derivative financial instruments as a result of unfavourable market conditions and unrealised foreign exchange translation losses,” the company said.

The group expects its adjusted earnings before interest, taxes, depreciation, and amortization for 15Q2 to be comparable to the preceding quarter.

Union Gaming said in a note that the warning indicates a growing operational performance gap with rival casino Marina Bay Sands. The resort does not have enough retail or MICE space to compete with Las Vegas Sands' property, it said.

"Today's profit warning implies that 1) RWS is likely once-again suffering from bad luck in the VIP segment, making 2Q15 the fourth consecutive quarter of well-below-normal hold, and 2) even after adjusting for bad luck, RWS is operationally lagging MBS, likely with a growing gulf in the higher margin non-VIP segments," it said.

Genting Singapore recently opened a new hotel in the Jurong district, but so far it has not had a measurable impact in driving mass visitation at Resorts World.

The stock plunged more than 8 percent in Singapore trading following the profit warning and closed at $0.82 on Wednesday after touching a session low of $0.80, its worst level since 2009.

Further details of the group’s performance will be disclosed when the it announces its 15Q2 financial results on August 13 2015.