COMM345: Media Relations

Term Project News Story

Group 6
Denise Tan Joyce Eng Lena Chang Melissa Law (Leader)

Genting Singapore: No reason to be moody?

By Melissa Law Shueh Li and Denise Tan Su-Wen 23 February, 2012 The Business Times Genting Singapore PLC announced yesterday that it has been accorded a credit rating of Baa1 and A- by credit rating agencies, Moodys and Fitch Ratings respectively. This is the highest investment-grade ratings accorded to any gaming company in the world today. Fitch Ratings stated in its announcement that the A- rating is equal to Genting Berhad's rating, reflecting the rating agencys confidence in the shared strategic and operational ties. Genting Singapore Chairman, Mr Tan Sri Lim Kok Thay, expressed his delight at the announcement. I am extremely pleased that the ratings highlight what the Genting name has been synonymous with for decades disciplined financial management, strong execution and track record in developing destinations. Genting is well known for its flagship, Resorts World Sentosa (RWS), whose casino is the third most expensive in the world, according to Reuters. Its latest financial results, the last quarter of 2011 proved to be a good end to the year in more than one way. Despite making losses of $150 million a year, the Group swung to a net profit of $262 million in the final quarter. Revenues were reported at $3.22 billion for the full year, with double-digit growth rates for both the gaming and non-gaming segments. The gaming segment grew by 14 per cent from 2010, while the non-gaming segment grew by 48 per cent. Net profits for the year exceeded the one billion dollar mark for the first time, at $1.01 billion, prompting the company to issue a dividend of 1 cent to all shareholders. These optimistic results mark RWS progress in realising its potential as Asias number one destination resort, said Mr Tan Hee Teck, president and chief operating officer of the Group. The dividend payout, though small, comes just 2 years after RWS opened its doors to visitors in 2010. Mr Tan Sri Lim said, Genting Singapore is at a green shoot stage by any standard...[the dividend] is a gesture of our appreciation to shareholders for their support. Supported by stable cash flow, a strong regulatory environment and the rapid growth of the Asian economies, Genting Singapore has one of the strongest balance sheets in the gaming industry.

However, not all the cards are on the table for Genting Singapore. Although its growth figures are encouraging, the Group still lags behind its competitor, Las Vegas Sands Corp, the parent company that brought Marina Bay Sands (MBS) to Singapore. According to Reuters, RWS currently captures 49.4 per cent of the market while MBS claims 50.6 per cent. Net revenue for the fourth quarter was $786.3 million and $806.9 million respectively. In spite of this, Genting Singapore stands firm in its belief that the company will continue to grow. "At the Group Corporate level, Genting Singapores efforts are focused towards identifying, evaluating and investing in new projects that provide revenue growth and net income streams to the Group. The continuing uncertain economic climate also presents some potentially attractive investment opportunities, Mr Tan said. Word Count: 491 words Why did we choose this angle? Writing a news story with a financial performance angle would hit a few news values, mainly: Prominence RWS is home to one of Singapores two Integrated Resorts, while Universal Studios Singapore (USS) is Southeast Asias first Hollywood-themed park. As the parent company of RWS, Genting Singapores financial performance would be of interest to The Business Times readers. Significance The Business Times target audience is individuals with an interest in financial markets and business. Some of The Business Times readers may also be potential or current Genting Singapore investors. Gentings financial performance and issuance of dividends will hence be important to them. With additional information on the performance of RWSs rival, MBS, these readers can then make a better-informed decision on whether to purchase or sell RWS stocks. Proximity RWS is a popular Singapore attraction that has received considerable media coverage since its opening two years ago. The Business Times readers who might be based in Singapore or have an interest in the country, would be interested in the latest developments in this new company. Unexpectedness The fact that RWS has been able to get the highest investmentgrade ratings accorded to any gaming company in the world despite being in business for only two years is relatively unexpected news. Continuity Genting Singapores announcement of its ratings comes at the end of most companies fiscal year. As such, there will be many reports on various companies financial performance and this article will be able to ride on the existing publicity.