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The
Business Times, 3 Jun 04
S'pore casino plan may hurt earnings: Genting
Its casino unit may want to invest in the S'pore casino project if
allowed
(KUALA LUMPUR) Genting Bhd, owner of Asia's biggest publicly traded
casino, said a plan by the Singapore government to set up a casino
in the city state may hurt the Malaysian company's earnings.
Genting's casino unit Resorts World Bhd may be interested in investing
in the Singapore casino project if the island's government allows
it to do so, Lee Choong Yan, executive vice-president for Resorts
World, told reporters in Kuala Lumpur.
It's the first time Kuala Lumpur-based Genting has commented on the
impact of potential competition from the region. The company has sought
to boost its power-generation business to become less reliant on casino
earnings in anticipation of competition from Singapore and Thailand.
'Genting is doing everything it can to diversify but casino operations
have grown to a point where they have to grow other operations at
a faster rate,' said Raymond Tang of CMS Dresdner Asset Management
Sdn in Kuala Lumpur. Still, diversifying is 'a double-edged sword,
because the margins in gambling are so good', he said. 'Any other
business lowers their overall margins.'
Shares of Genting, controlled by the Lim Goh Tong family and with
interests in power, oil and gas, plantations and cruise operations,
have fallen 8.4 per cent this year. Resorts, which also owns hotels,
has dropped 12 per cent this year.
Singaporeans account for more than 20 per cent of Resorts' hotel guests,
while Thai visitors form less than 7 per cent, Mr Lee said. 'Singaporeans
constitute a good number of our visitors, so there will be some effect,'
Mr Lee said. 'We will be monitoring the situation closely. If the
opportunity arises, we would be interested to' consider investing
in the casino project in Singapore, he said.
Genting's profit for the first-quarter ended March 31 rose 14 per
cent to 223 million Malaysian ringgit (S$100 million) from the same
period a year ago.
Last month, Las Vegas Sands Inc, known for its Venetian Casino Resort
in the US gambling capital, said it would meet Singapore government
officials to discuss plans for the first casino in the city state.
Singapore, which only allows lotteries and betting on horse racing,
is considering casinos as part of an island-resort development in
a bid to attract tourists and boost its economy. - Bloomberg |
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