Genting Bhd made a leap of Mike Powell proportions when it submitted (4QFY12) reports of a net profit of RM2.48 billion ($802 million) on revenue of RM4.49 billion. That is a mind boggling 220% higher than the (3QFY12) results that showed a net profit of RM772.91 million. Yet despite the monstrous increase in net profit, revenue has declined from the previous quarters submission of RM4.49 billion.
So why such a big spike in net income?
The answer lies in Selangor, Malaysia, where Genting has just disposed of a power plant that was once recognized as the Genting Power Division’s ‘jewel’. Genting Sanyen Kuala Langat power station is a 720 MW gas fired combined cycle power plant that provides electricity to Tenaga Nasional Berhad. The plant, which was sold for RM2.3 billion, is the only thermal power plant to provide its own water supply in Malaysia.
The Q4 net profits will be a welcome boost for Genting Bhd, after seeing earnings decline in the previous three quarters. Reduction in earnings from its core gaming business and lower than expected palm oil prices cited as the main culprits. The news saw Genting leap as much as 1.7% to 9.65 ringgit in Kuala Lumpur, the biggest intraday gain since early January. The stock has fallen 7.8% in the past 12-months.
The news is not so rosy in the U.K where Genting UK have revealed plans to close a second casino, in recent months, after The Fox Poker Club in London was shut down in early December. The latest casualty is the Genting establishment in Friar Gate, Derby and at least 41 jobs are at risk. Genting has entered into a 30-day consultation period and it is believed that the displaced staff will be offered positions at the nearby Genting Club Riverlights.