Genting made an announcement that it's Q3 net profit doubled following better earnings from Resorts World Sentosa in Singapore which commenced this year. For the nine months ended Sept 30, Genting's net profit swelled to RM1.74bil, or 125% compared with RM798.94mil in the previous corresponding period. Revenue rose 69% to RM11.1bil from RM6.6bil before. With 3 more months to go and with the best quarter for the year I am now positive that it will break the RM14 billion mark I have set previously.
Singapore expects a record 12 million visitors to the Republic Island for 2010 helped by the success of the city-state's two multi-billion-dollar casinos, a remark made by the Prime Minister Lee Hsien Loong last week. This translates into a 24% rise from last year's 9.68 million. It was actually Singapore's overall plan double visitor arrivals to 17 million by 2015. Economists have estimated that tourism currently accounts for about 5-7 percent of Singapore's economy but could grow to as much as 12 percent by 2015 based on government projections on visitor spending.
There was a one-off net gain of RM413.6mil from the oil and gas division. The payment was from BP Global Investment (BPGIL). Genting should be using this cash proceeds as working capital.
Genting Malaysia had poorer performance due to lower business volume, weaker luck factor in the premium business and expenses from start-up costs for its video lottery facility in New York. Revenue slipped 7.7% to RM1.2bil from RM1.3bil. Revenue and profit from the UK casino operations also decreased mainly due to poor luck factor (high payout) and the weaker sterling. Both of these are not a major concern for me as the plantation division improved on the back of higher palm product prices and increase in fresh fruit bunches production.
Surprisingly Genting Malaysia has also publicly said it expected its performance in Malaysia to be affected by regional competition and increase its marketing activities to address the growing competition. I have expected such competition to arise but with Malaysia and Singapore arguably best developed countries in ASEAN will continue to hold their appeal. Thus overall performance would not be significantly affected.
Genting continues to be a good BUY at current price for its casino exposure in Malaysia, Singapore, UK and recently US. I have loaded Genting as part of my assets at RM10.33 earlier on with the long term view that it has the most upside potential from earnings via Resorts World Sentosa. 1H'2011 will be an interesting year for Genting, let's look forward to it.
No comments:
Post a Comment