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Genting Singapore shares slump after Q1 earnings fall

Tourists arrive at the Genting Singapore's Resorts World Sentosa in Singapore, April 29, 2013. — Reuters picTourists arrive at the Genting Singapore's Resorts World Sentosa in Singapore, April 29, 2013. — Reuters picSINGAPORE, May 3 — Shares of Genting Singapore PLC fell as much as 8.1 per cent early today after the casino operator reported a 35 per cent drop in core earnings and flagged a cautious outlook due to muted economic growth in China.

The shares fell as low as S$1.48 after closing 4.9 per cent higher yesterday before the results were released. Genting Singapore was among the top traded stocks by value and volume this morning.

Genting Singapore’s January-March adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to S$249.7 million (RM610 million) from S$381.4 million a year earlier. Five analysts polled by Reuters had on average expected a profit of S$359 million.

OCBC Investment Research pared its 2013 fiscal year revenue estimate by 10 per cent and core earnings forecast by 16 per cent. It downgraded Genting Singapore stock to “sell” from “hold” and cut its target price to S$1.41 from S$1.52, saying the recent run-up in the share price seems “slightly overdone”.

But OCBC said it would turn into a buyer closer to S$1.30 or lower and that a longer-term catalyst could come from a potential casino licence in markets like Japan. — Reuters

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