Malaysia's Genting announces loss for the third quarter
Sunday 30th November 2008
Malaysia's sole casino operator, Genting, has just reported losses for the third quarter of 2008 in the regional $11.1 million. While the company is not wholly exposed to the entertainment and casino industry, they do have particular exposure to the Far East casino market and the UK Casino sector (via their Stanley Leisure offshoot).
It appears that the overall the casino business saw profits rise although a loss on foreign exchange conversions from the UK operation, due to the fall in the value of sterling, seems to have dented profitability in the short term. However, rather ominously the group has warned of a challenging environment in the UK where the casino sector is under serious pressure for the first time in a number of years. Increased regulatory costs, lower visitor numbers and increasing general costs have all contributed to the downbeat scenario.
The company is also in the throes of building a $6 billion casino project in Singapore and while this development is still ongoing, there are concerns about an extended payback period. Interestingly the company has not mothballed the development which is an obvious sign of the underlying strength of the operation.