GGRAsia – Genting HK expects net loss of up to US$75 mln in 1H

Genting HK expects net loss of up to US$75 mln in 1H

Aug 02, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck

Genting Hong Kong Ltd, an operator of casino cruise ships and a joint venture casino operator in the Philippines, has issued a warning that it expects to record a net loss in the range of US$60 million to US$75 million for the six months ended June 30, 2016.

The firm said that the numbers contained in its Monday update did not include the contribution from Travellers International Hotel Group Inc, the joint venture that operates the Resorts World Manila casino resort in the Philippines.

The expected loss compares with a net profit of US$2.1 billion for the six months ended June 30, 2015.

The company said the expected net loss is mainly attributable to the absence of a one-off accounting gain of US$1.57 billion following the reclassification of Genting Hong Kong’s investment in Norwegian Cruise Line Holdings Ltd and the absence of a gain of US$599.6 million from the disposal of shares in Norwegian Cruise. Both of these operations were completed in the first half of 2015.

The Hong Kong-listed company said that other factors leading to the expected loss in the first half of 2016 included: one-time start-up and marketing costs for the launch of new Dream and Crystal cruise brands and products; and higher overall operating and selling costs, and higher general and administrative expenses.

Genting Hong Kong, a subsidiary of Malaysian conglomerate Genting Bhd, has accelerated its expansion plans for its cruise business. The company last month announced it would invest more than EUR100 million (US$110.9 million) to upgrade the three shipyards in Germany that it acquired in April. The move follows the company’s earlier purchase of the Lloyd Werft Bremerhaven shipyard in Germany last year. Genting Hong Kong plans to build new cruise ships to expand its fleet.

Genting Hong Kong already operates the Star Cruises brand and it acquired Crystal Cruises in 2015. The firm’s new Asian cruise line, Dream Cruises, is scheduled to start operations in November 2016, according to previous filings.