Genting Singapore shares dip as currency losses hit profit

Genting Singapore Plc fell the most in six years after the casino operator warned of a significant fall in second-quarter profit on derivative and currency losses, amid a downturn in gambling by mainland Chinese.
Genting Singapore fell as much as 11 percent, the biggest slump since May 2009. The shares were down 6.1 percent as of 9:50 a.m. yesterday in Singapore, against the 0.3 drop in the benchmark Straits Times Index.
The profit slump is mainly due to “fair value loss on derivative financial instruments” following unfavorable market conditions and unrealized foreign-exchange translation losses, Genting Singapore, which operates the Resorts World Sentosa, said in a statement. It expects adjusted earnings before interest, taxes, depreciation and amortization for the quarter ended June 30 to be comparable with the previous three months.
“Currency headwinds has been plaguing Singapore gaming operators for quite a while from all their primary segments such as China, Indonesia and Malaysia,” said Grant Govertsen, an analyst at Union Gaming Group in Macau. “That has been impacting results over the past several quarters.
Gambling revenue in Singapore and Macau has slumped as Chinese high rollers curb spending to avoid scrutiny amid President Xi Jinping’s crackdown on corruption. Genting Singapore’s net income plunged 73 percent to S$62.7 million (USD45.4 million) in the three months ended March 31.
Separately, Landing International rose 2.7 percent in Hong Kong trading after announcing it would buy out cruise operator Genting Hong Kong’s 50 percent stake in Magical Gains, an owner-operator of a casino on Korea’s Jeju island. Genting Hong Kong, a sister company of Genting Singapore, fell 2.9 percent.
Genting Singapore will remain Landing’s joint venture partner on another project on the Korean island, to be named Resorts World Jeju, Landing said in the statement late Tuesday. Netty Ismail and Jonathan Burgos, Bloomberg