Shares of Genting Singapore Plc (GENS), the casino operator with the largest market capitalization in Southeast Asia, registered the largest drop since May, after the company announced earnings, which did not match experts expectations.
Genting shares fell 4.6% to S$1.335, or the most considerable intraday loss in nine months. Companys stocks closed at S$1.36 in Singapore. They have declined 9% this year, or the largest drop on the Straits Times Index.
Genting Singapore Plc (GENS) said on February 20th that its net income rose 5% to reach S$140.3 million (or $110.9 million), while the median estimate of analysts showed a net income of S$159 million. This probably came as a result of the fact that high-stakes gambling rose less than projected, while mass market revenue dropped, according to experts.
“We downgrade to sell to reflect sluggish gross gaming revenue trends in 2014,” Vincent Khoo, an analyst at UOB-Kay Hian Holdings Ltd. in Singapore, wrote in a note on February 21st, cited by Bloomberg. The brokerage revised down its forecast regarding the price of companys shares to S$1.27 from S$1.42 previously.
Labor market conditions in Singapore may curb this years earnings, according to Genting. Prime Minister Lee Hsien Loong is urging companies to increase their output, while reducing the number of their employees. Singapore is faced with an aging population and voter discontent about foreign workers issues.
“Our net income will be challenged by the tight labor market, coupled with rising costs”, according to Gentings statement. “Whilst we are working on improving productivity in some of our business segments, the labor-intensive nature of our business only allows for limited gains from any productivity measures that we undertake.”
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