Gaming sector volatility hurts profit of GuocoLeisure

GuocoLeisure's full year net profit plunged by 43.4 per cent to US$44 million (S$55.7 million).

This was despite revenue rising 2.8 per cent to US$380.3 million for the year ended June 30.

The higher turnover was due mainly to higher revenue generated from the hotel segment during the 2012 Summer Olympics.

While the revenues of the hotel operations showed a growth of 4.5 per cent, volatility in the gaming sector affected overall revenue performance.

Bass Strait oil and gas royalties fell by 16.9 per cent due to lower average crude oil prices and lower oil production compared to the previous financial year.

In addition, a one-off royalty distribution of US$5.5 million arising from the resolution of a royalty entitlement dispute was received in the previous financial year.

Earnings per share slumped to 3.3 US cents from 5.9 US cents previously while net asset value per share eased by 0.4 US cent to 83.9 US cents.

Looking ahead, GuocoLeisure noted that London hotels are experiencing a drop in demand which, combined with the need to absorb a significant increase in new supply of rooms prior to the 2012 London Olympics, will present challenges to hoteliers this year and next.

"The appointment of a new CEO for our hospitality business and the rebranding plans for the hotels is expected to help our UK based business to weather the current economic cycle," it said.

An unchanged final dividend of two cents a share was recommended.