GEN HK cuts 1H loss by 31pct as cruise biz improves

Aug 28, 2018 Newsdesk Latest News, Philippines, Rest of Asia, Top of the deck  

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Operator of casino cruise ships and investor in Asian casinos Genting Hong Kong Ltd reported a loss attributable to shareholders of US$140.1 million for the first half of 2018, an improvement of 30.7 percent compared with US$202.2 million in the prior-year period.

Genting Hong Kong – a subsidiary of Malaysian conglomerate Genting Bhd – told the Hong Kong Stock Exchange on Monday the company’s performance was due mainly to an improvement in its cruise business.

Group-wide revenue for the six months to June 30 stood at US$777.6 million, up 46 percent from a year earlier. Revenue from cruise and cruise-related activities increased 36.2 percent year-on-year, to US$642 million in the first half of 2018.

Genting Hong Kong has been accelerating expansion plans for its cruise business and has developed a three-brand portfolio of cruise lines serving different parts of the market: Crystal Cruises for what it terms the ultra-luxury segment; Dream Cruises for what it describes as the premium segment; and Star Cruises for what it defines as the “contemporary” segment.

In Monday’s filing, the company said the improvement in revenue was driven by operating more cruise ships during the reporting period and by higher occupancy and increases in passenger ticket and onboard revenue. The boost in cruise operations also led to higher costs, with total operating expenses – excluding depreciation and amortisation – growing by 35.6 percent year-on-year to US$647.4 million.

Genting Hong Kong reported adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$63 million for the first half of 2018, compared with a negative US$18.3 million in the prior-year period.

The improvement in adjusted EBITDA from cruise and cruise-related activities was however partially offset “by a lower cost capitalisation into shipbuilding costs for the shipyards in first half 2018 as a result of a lower than expected production level in the shipyards,” said the firm.

Genting Hong Kong is preparing to lay the keel of the 20,000-ton Crystal Endeavor next month and the keel of the first of the company’s 204,000-ton Global Class ships will be laid in September. Both events will increase cost capitalisation and the rate of production, stated the company in Monday’s filing.

Genting Hong Kong said its share of profit from Travellers International Hotel Group Inc – a venture with local conglomerate Alliance Global Group Inc – totalled US$15.2 million in the first half of 2018, compared with US$2.5 million a year earlier. The increase was due to higher non-operating income recognised in the six months to June 30, said the Hong Kong-listed firm.

Genting Hong Kong announced an interim dividend of US$0.01 per share, amounting to a total payout of US$84.8 million, to be paid on September 27.

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