5th Feb 2014
"If it continues to succeed, the investments put in today could be the seeds for future bumper crops. For now, though, chances are that rich dividends will not be in the horizon for some years to come as the group puts its money to work."
UNLIKE the regular consumer companies with sizeable cash flows, the Genting group has hitherto chosen to return relatively little cash in dividends to its shareholders.
Instead, the billions made by its flagship hilltop casino resort and its four-year-old cash cow in Singapore are channelled to grow other casino resorts.
Billions of ringgit have been spent and committed to expanding the “Resorts World” brand across the globe since the success of Resorts World Sentosa in 2010, and indications are that billions more will be spent in Genting’s bid to make its mark abroad.
Not everyone is complaining, though. In fact, some analysts see opportunity amid the cash needs.
Expectations are that the Genting group would have a local listing for each of its foreign operations — once they are sizeable enough to stand on their own — to realise some value as well as create a new vehicle to tap the capital markets for further expansion. Such was the case for Genting Singapore plc and Genting Hong Kong Ltd’s associates Travellers International Hotel Group Inc (which houses Resorts World Manila) and Norwegian Cruise Line Holdings Ltd (NCL), which listed on Nasdaq last January.
This is why market watchers expect Genting Bhd and its 49.3%-owned Genting Malaysia Bhd to eventually pool their US-based assets for a combined listing.
