Genting Malaysia remains upbeat

KUALA LUMPUR: Genting Malaysia Bhd believes a weaker ringgit will not have a significant impact on the group's financials, according to its chairman and CEO Tan Sri Lim Kok Thay.
While the decline in the ringgit would increase the amount of US dollar-dominated bank borrowings for its overseas investment, he stressed that it could also encourage more inflow of foreign tourists, especially with the completion of the 10-year Genting Integrated Tourism Plan (GITP).
"While it's a concern, we're quite positive moving forward," he told shareholders at Genting Malaysia's AGM yesterday.
As part of the GITP, the Twentieth Century Fox Theme Park is slated for opening by the end of 2016.
Lim said the company is always on the lookout for opportunities locally and abroad in the leisure and hospitality segment following its failed bid to develop and operate a gaming facility in New York State, US.
In response to a question raised on the bid by the Minority Shareholder Watchdog Group (MSWG), Genting Malaysia said that some RM98.2 million expenditure incurred for the casino licence application had been written off in 2014.
On the US operations, Lim noted that Genting Malaysia is implementing cost reduction measures especially in labour costs.
"There was an increase in expenses due to redundancies that cost a fair bit," he said.
Lim expects the US market will start to see a positive impact from the efficiency measures next year and would not register a substantial increase in operating costs.
However, Lim said there will be higher working capital for the UK business as Resorts World Birmingham will open its doors in the second half of this year. "All looks promising for us in Birmingham," he added.
Genting Malaysia, the second largest casino operator in the UK, operates 41 casinos there. Last year, it recorded a 9% increase in earnings before interest, taxes, depreciation and amortisation (ebitda) to RM252.3 million for the UK operations.
Meanwhile, when asked of the expansion into Japan, Lim said sister company Genting Singapore is actively pursuing the opportunity to enter that market, and not Genting Malaysia.
"We're not competing with each other, it benefits no one at the end, it will only confuse the Japanese authorities, who don't know which is the real Genting group," he added. Genting Singapore is 52.56%-owned by Genting Bhd.
It was reported that Japan's pro-casino lawmaker had in April submitted a bill to legalise casino gambling.
For the financial ended Dec 31, 2014(FY14), Genting Malaysia's net profit fell by 31.25% to RM1.1 billion from RM1.6 billion in FY13, mainly due to lower contribution from the Malaysian market.
Its first-quarter net earnings, however, were up 1.06% to RM362.1 million compared with RM358.29 million in the previous corresponding period.