enting Star CruisesGenting Hong Kong Chairman and CEO, Lim Kok Toy, said in a statement that the increase in profits “would enable the company to focus on and put more resources to expand its cruise and cruise-related businesses [and] to redeploy the cash proceeded flexibly to further explore and fund other investments and business opportunities as they may arise.”
The Hong Kong-listed subsidiary of the Malaysian gaming giant also plans to use the proceeds to help fund the US$ 1.2bn Genting Integrated Tourism Plan to develop, expand and refurbish hotels, theme parks and infrastructure at Resorts World Genting. The Hong Kong subsidiary also owns 50pc of Resorts World Manila in the Philippines.
Phenomenal results for the first half of the year can be attributed to realignment toward the cruise sector, as well as the gain and loss of equity stakes in various operations. The biggest win during the period was an accounting gain of $1.56bn for the reclassification of Norwegian Cruise Line Holdings enabling it to offload its vested interest for a $599.6m gain.
Revenue from cruise and cruise-related activities increased 2.5pc to US$ 265.1m during the period from US$ 258.8m in the prior-year period. Net revenue was up 6.4pc year-on-year to $218m due to higher passenger ticket revenue as a result of the acquisition of US-based Crystal Cruises and its subsidiaries, which the company acquired for $550m in March.
While total cruise occupancy was down to 69pc from 74pc in the first half of 2015, on-board and other revenues grew 5.7pc to $32.7m, mainly driven by higher on-board retail spending. Revenue from non-cruise activities decreased, however, by 56.2pc to $10m due to lower income from aviation, travel agent and marketing activities related to its Manila operation.
Group company Genting Berhad, which is celebrating its 50th anniversary this year, is 40pc owned by Lim’s Huat Realty Sdn Bhd and holds 52.6pc of Genting Singapore and 49.3pc of Genting Malaysia. Lim’s exposure in Genting Hong Kong is greater with about 62pc owned through private vehicles and that could rise to 80pc as Genting Hong Kong looks to offload more shares.