Genting Singapore 2Q Net Profit Falls 32% to S$165.5 Mln; Ebitda Misses

10 Aug 2012

-- Genting Singapore's second-quarter net profit slumps 32% to S$165.5 million -- Second-quarter earnings before interest, tax, depreciation and amortization fell 10% to S$311 million -- Group earnings affected by lower premium-gambler volumes, higher costs from expansion works (Updates with details and background throughout.) Genting Singapore PLC's (G13.SG) second-quarter net profit slumped 32% from a year earlier due mainly to lower premium-gambler volume and higher costs from ongoing expansion works at its integrated resort, the gaming company said Friday. The operator of the Resorts World Sentosa casino resort in Singapore also reported lower-than-expected earnings before interest, tax, depreciation and amortization for the April-June period, reinforcing analysts' prognosis of slowing growth in the city-state's casino market and their views that the group may need to seek overseas opportunities for expansion. "The global economy looks increasingly unfavorable...we will continue to see similar narrower Ebitda margins as in the current quarter," Genting Singapore said in a statement. But its strong cash position also "presents significant advantage for the group to capitalise on any suitable investment opportunities," it said. Genting Singapore reported a net profit of 165.5 million Singapore dollars (US$132.8 million) for the three months ended June 30, compared with S$242.9 million. Second-quarter Ebitda were S$311 million, down 10% from S$345.8 million a year ago. The result was also 17.4% lower than Ebitda of S$376.4 million in the first quarter. A decline in casino business volumes especially in the premium-player segment weighed on earnings, the company said in a statement. The result also missed the S$373 million average Ebitda estimate of a Dow Jones Newswires poll of five analysts. Resorts World Sentosa contributed S$313.1 million in Ebitda. Group revenue for the period fell 3% to S$702.2 million, while gaming revenue from the casino--which opened in February 2010--fell 3.7% to S$562.3 million. Genting Singapore, a unit of Malaysian gaming group Genting Bhd. (3182.KU), has raised about S$2.3 billion this year by issuing perpetual securities, and analysts believe it is seeking opportunities in markets like Mongolia, Japan and South Korea. But its most aggressive moves in recent months have come in Australia, where Genting Singapore and sister company Genting Hong Kong Ltd. (S21.SG) have taken a combined 9.9% stake in Echo Entertainment Group Ltd. (EGP.AU), which owns casinos including The Star in Sydney. The move sparked talk of a bidding war between Genting and Australian billionaire James Packer, who is also seeking to increase his holdings in Echo.