Malaysia Genting Q1 net profit halves, outlook tough
Malaysian gaming group Genting (GENT.KL) said quarterly net profit halved, hurt by weaker revenue at its casinos in the UK and lower plantation earnings.
Genting, which also runs oil palm estates and power plants, said first-quarter net profit dropped to 213.119 million Malaysian ringgit ($60.68 million) from 439.415 million a year ago.
“The group’s prospects for the remaining period of 2009 may be impacted by the uncertainty surrounding the pace of global economic recovery and the spread of the Influenza A (swine flu story”>H1N1) virus,” said the company in a statement on Thursday.
“The trading revenue of the UK casino operations have been and will continue to be adversely affected (by a weak economic outlook),” it said.
A lower-than-expected power tariff rise in China and an expected surge in costs for its new casino in Singapore will also weigh on earnings, said Genting.
Local analysts do not provide quarterly earnings forecasts. Prior to the earnings, Genting was expected to earn 1.08 billion ringgit for fiscal 2009, compared with 1.37 billion in the previous year, according to Reuters Estimates.
Genting, the only casino licence holder in mostly-Muslim Malaysia, is building a casino resort in neighbouring Singapore.
The Malaysian group also controls Genting Leisure Plc, the largest casino operator in the United Kingdom with more than 40 locations.
Analysts had said they expect Genting’s earnings to remain weak in the coming quarters because operating costs were expected to jump as the company prepares the opening of the Singapore casino next year.
Genting may not be able to recoup its investments from the casino as quickly as it had hoped due to the economic slowdown and the threat of an swine flu story”>H1N1 influenza pandemic, said the analysts.
Genting shares ended flat at 5.45 ringgit before the earnings on Thursday. The stock has gained 47.3 percent so far this year, outpacing the wider market’s.KLSE 18.76 percent gain.
http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSKLR16829220090528
Category: Malaysia
