Genting incurred a net loss of RM40 million for 3Q2008

Genting has just announced its results for 3Q2008 ended 30/9/2008, where it reported a net loss of RM40 million as compared to a net profit of RM291 million recorded in 1Q2008 or RM275 million achieved in 3Q2007. Turnover increased by 9.7% q-o-q or 6.5% y-o-y to RM2.37 billion.

The poorer results was attributable to lower profit from core divisions [such as Power division (due to higher cost of coal); Plantation division (due to lower prices for FFB); and Leisure & Hospitality division (due to poorer results from both Genting Highlands Resort & UK casino operations)] as well as impairment loss of RM396.3 million (which includes goodwill write-off of RM236.0 million by Genting International arising from its acquisition of Genting Stanley, UK and an impairment loss of RM55.2 million from the Group investment in power plants in China).



From the monthly chart (Chart 1), we can see that Genting has tested its long-term uptrend line support at RM3.60 in October. Presently, Genting's share price is in a medium-term downtrend with resistance at RM5.70-80 (see the weekly chart, Chart 2). With the poor results just announced, there is a possibility that the share price will drop back to re-test the 'low' of RM3.58-60 again.


Chart 1: Genting's monthly chart as at Nov 27, 2008 (source: Quickcharts)


Chart 2: Genting's weekly chart as at Nov 27, 2008 (source: Quickcharts)

I believe that Genting could be a good stock for long-term investing. A good entry level could be between RM3.60-80.