Genting HK flags up to US$550mln loss full year 2016
Casino ship operator and gaming investor Genting Hong Kong Ltd expects to record a consolidated net loss in the range of US$500 million to US$550 million for full year 2016, the firm said on Monday. The figure excludes the firm’s share of results of Travellers International Hotel Group Inc for the period.
The expected 2016 net loss compares with a consolidated net profit of US$2.1 billion – also excluding the firm’s share of results of Travellers International – for the year ended 31 December 2015.
Genting Hong Kong – a subsidiary of Malaysian conglomerate Genting Bhd – 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.
The firm is also an investor in Philippines casino operator Travellers International, through a joint venture with local conglomerate Alliance Global Group Inc. Travellers International operates the Resorts World Manila property near Manila Ninoy Aquino International Airport in the Philippine capital.
In a Monday filing to the Hong Kong Stock Exchange, Genting Hong Kong said the expected decline in consolidated net results was attributable – among other factors – to “the absence of a one-off accounting gain of US$1,567.4 million recognised arising from the reclassification of the group’s investment in Norwegian Cruise Line Holdings Ltd… from ‘interest in associates’ to ‘available-for-sale investments’ in 2015 and a total gain of US$658.6 million arising from the disposals of certain stakes in Norwegian Cruise Line in 2015”.
Genting Hong Kong stated that also expected to hurt its bottom line in 2016 were investments made in its casino business, including the “one-time start-up and marketing costs for the launch of new Dream and Crystal cruise brands and products in 2016”.
The group additionally logged an impairment loss of about US$300 million on its available-for-sale investment of its interest in Norwegian Cruise Line ordinary shares, caused by a decline in its fair value in late 2016, it stated.
Despite the decline in consolidated net results, Genting Hong Kong is “expected to record an improvement on its underlying cruise business excluding the one-time start-up costs of its new Dream and Crystal cruise ships,” the firm stated.
Genting Hong Kong expects to announce its full year 2016 results in March.
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