Genting Singapore sees sharp decline in net profits

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Genting Singapore sees sharp decline in net profits
Updated:2024-06-20 15:42    Views:118

Genting Singapore Plc experienced the biggest fall in net profits in the past six years recently, with shares plunging more than 8 percent. The biggest reason for this situation, according to the company, is the fair “value loss on derivative financial instruments” caused by the unsuccessful realization of foreign exchange translation losses and bad market situation.

Genting Singapore declined exactly 8.3 percent to 82.5 Singapore cents. The numbers are the lowest since August 2009. The company’s shares were the most actively traded for the day with approximately 61.4 million shares passed from owner to owner. This is four times more than the average on a daily basis for the past three months. The company presumes that adjusted earnings before taxes, interest and amortization for the quarter until June 30 to be comparable to the previous quarter.

Grant Govertsen, an analyst from Union Gaming is quoted in several Asian news outlets as saying that the decline in net profit is caused by bad luck in the VIP department at Resorts World Sentosa (RWS) making the 2nd quarter the fourth consecutive one of below average hold. Moreover, even if the bad luck is improved, RWS is still behind Marina Bay Sands (MBS) apparently, with an increasing number in the non VIP sectors.

Furthermore, the company’s new hotel in Jurong that was recently opened still hasn’t made an impact in attracting a huge number of visitors at Resorts World. Perhaps the lack of incentives, exhibitions and meetings at RWS is another reason as these sectors are growing at MBS and have generated more cash.

The net income of Genting Singapore in the first quarter until March 31 declined 73 percent to S$62.7 million. Revenues also dropped 23 percent to $639.2 million while gaming revenue fell 26 percent to $494.9 million year-on-year.