Genting 1Q net profit surges 361% on disposal gain

Genting Bhd saw its net profit surge 361% to RM603.06 million or 16.2 sen per share for the first quarter ended March 31, 2017 (1QFY17), from RM130.83 million or 3.52 sen per share in 1QFY16, helped by a gain on disposal.

 

Revenue for the quarter, however, grew a marginal 1% year-on-year to RM4.77 billion from RM4.71 billion.

In a statement, Genting said its performance for the quarter was boosted by a gain of RM302.2 million recognised from the completion of the sale of Genting Singapore Plc’s 50% interest in associate Landing Jeju Development Co Ltd.

The group said Resorts World Sentosa (RWS) benefited from the stronger Singapore dollar exchange rate to the ringgit during 1QFY17, translating to higher revenue for the quarter.

As for Resorts World Genting (RWG), it reported stronger revenue contribution due to better hold percentage from the mid to premium segment of the business, even though business volumes were lower. However, RWG pre-tax profit slid on higher costs related to the premium players business, and costs incurred for the new facilities under Genting Integrated Tourism Plan (GITP).

The group’s operations in UK also saw lower revenue and pre-tax profit, due to the weaker British pound against the ringgit.

As for its Resorts World Casino New York City (RWNYC), it saw better performance following an improved commission structure with the New York state authority, which, coupled with the stronger US dollar versus the ringgit, drove revenue and pre-tax profit higher for its US and Bahamas business.

"There was also a lower adjusted loss before interest, tax, depreciation and amortisation (LBITDA) from the Resorts World Bimini operations in Bahamas following the cessation of Bimini Superfast cruise ferry operations in 1QFY16," it said.

Meanwhile, its plantation business in Indonesia recorded higher revenue and profit amid higher palm product selling prices and higher fresh fruit bunch (FFB) production. But its plantation business in Malaysia, despite higher prices, posted lower performance amid lower sales.

The power division was impacted by lower construction revenue, due to lower percentage of completion for the 660MW coal-fired Banten plant in Indonesia, while the oil and gas division benefited from higher average oil prices.

Going forward, the group said it continues to focus on the development of GITP, which is expected to elevate RWG’s position as the destination of choice in the region, while RWS remains focused on growing the premium mass market.

For the plantation business, Genting said the movements in palm product prices and crop production trends will continue to have significant influence. It expects FFB production growth to be driven by the addition of newly-mature areas and the progression of existing mature areas into higher-yielding brackets at its Indonesian estates.

Genting closed down 21 sen or 2.11% at RM9.73, giving it a market capitalisation of RM37.03 billion.