Genting Singapore shares slip to 4-year low

SINGAPORE — Shares in casino operator Genting Singapore declined 2.8 per cent to their lowest level in more than four years at the close of trading yesterday after weakness in the high-rollers business at rival Marina Bay Sands (MBS) stoked worries of poor results at the gaming firm.

Macquarie Research said in a report that MBS’ third-quarter VIP volumes could send “panic signals” in the market. “We believe the de-rating for Genting Singapore’s earnings is still only halfway and most of the street will now have to taper expectations from the local gaming market,” said Macquarie, which has an “underperform” rating on Genting.

Shares of Genting, which operates Resorts World Sentosa, fell to S$1.06, their weakest since June 2010. Down about 29 per cent so far this year, the stock is the worst performer in the Straits Times Index. Genting is due to report quarterly results early next month. Parent company Las Vegas Sands reported a fall of 34 per cent in VIP volume business, to US$9.1 billion (S$11.6 billion), at MBS in the quarter ending last month, Sands’ earnings statement showed. MBS’ overall revenue fell 5 per cent to US$735.5 million due mainly to its core casino business. But its non-gaming businesses mostly posted higher revenues.

Casino revenue at MBS fell 8.7 per cent to US$573.5 million during the quarter. Rooms revenue rose 8.9 per cent to US$101.6 million, food and beverage revenue increased 7.9 per cent to US$47.9 million and mall revenue gained 17.9 per cent to US$44.8 million. At the company-wide level, Sands’ revenue declined 1 per cent to US$3.53 billion, lower than projections of US$3.6 billion by analysts surveyed by Bloomberg.

Casino betting in Macau, where Sands gets about two-thirds of its revenue, fell for the fourth straight month last month as a crackdown on corruption on mainland China kept the biggest players away from the world’s largest gambling market.

Analysts said market players are still travelling in large numbers to Sands’ resorts in Macau and Singapore even as high rollers are staying away. Mr Sheldon Adelson, Sands chairman and chief executive officer, said he was optimistic about the outlook in Macau: “We remain confident that our market-leading Cotai Strip properties, which will be complemented by The Parisian Macau, targeted to open late next year, will meaningfully enhance the appeal of Macau to business and leisure travellers and provide an outstanding platform for growth in the years ahead.”

At a conference call with investors, Mr Adelson said he would soon be taking a trip to Japan and South Korea, where the company is looking to build casinos. He said he was not interested in pursuing resorts open only to foreigners, as had been suggested in both countries. AGENCIES