Genting Singapore shares sink after profit warning

The casino at Resorts World Sentosa.
The casino at Resorts World Sentosa. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Genting Singapore shares sank on Wednesday morning after the operator of Resorts World Sentosa said it expects a "significant" fall in net profit for the second quarter.

In a statement to the Singapore Exchange on Tuesday, Genting blamed the expected fall in earnings to derivative losses as a result of unfavourable market conditions and unrealised foreign exchange translation losses.

Genting added that, notwithstanding the profit loss, it expects adjusted earnings before interest, taxes, depreciation and amortization for the quarter ended June 30 to be comparable with the previous three months.

It advised its shareholders and investors were advised to exercise caution when dealing in the company's shares.

Genting shares fell as much 11 per cent to a six-year low of 80 cents soon after trading opened. It pared losses and was trading down 6.1 per cent at 84.5 cents at 9:40am.

The stock, which is the worst performer on the Straits Times Index, is headed for its biggest single-day fall since January 2010, Bloomberg News reported.

Gaming revenue in Singapore and Macau has slumped as a graft crackdown in China curtails the number of high rollers from the Chinese mainland. Adding to the pain is a stronger US dollar and slowing economies.

Genting Singapore's first quarter net income plunged 73 per cent to $62.7 million.

Marina Bay Sands, owned by Las Vegas Sands Corp., posted last month a sharp 11.4 per cent drop in second quarter revenues to US$713 million and a 13 per cent plunge in Ebitda - a measure of profit before tax, interest and other items - to US$363.3 million.

Genting Singapore said it will provide more details of its financial performance when it unveils earnings on Aug 13. It said it is still finalizing its second-quarter accounts.