KUALA LUMPUR: Genting Bhd’s net loss widened to RM120.78 million in its fourth quarter (4Q) ended Dec 31, 2008, from RM40.38 million in the preceding three months due to an impairment loss of RM781.5 million posted by its unit Resorts World Bhd from its investment in Star Cruises Ltd.

Revenue rose to RM2.39 billion from RM2.25 billion a year earlier, and was relatively flat against the RM2.37 billion in the preceding quarter.

The impairment loss as well as lower one-off gains took a toll on Genting’s FY08 results. Net profit plunged to RM569.3 million from RM1.99 billion a year earlier, despite achieving its highest-ever revenue of RM9.1 billion versus RM8.48 billion in FY07.

The company yesterday proposed a final gross dividend of four sen per share. The group had slipped into a loss position in 3Q08 due to impairment of UK casinos and China power assets.

The group’s oil and gas division recorded higher revenue in 4Q08 as did its lesiure and hospitality segment in line with the higher turnover from Genting Highlands Resort’s operations.

However, the plantation division’s profit was affected by lower palm product prices and the power division was affected by a one-off windfall profit levy imposed by the government.

“In addition, the China-based Meizhou Wan power plant suffered a loss due to reduced generation of electricity and higher cost of coal compared to 4Q07,” it said.

Genting also highlighted that its 4Q07 results had included one-off gains from the dilution of its shareholding in Resorts and Genting International plc.

It said the UK casino operations suffered a loss before impairment losses, as a result of lower business volume, redundancy costs, write-offs due to closure of casinos, bad debts, higher gaming duties pursuant to changes in gaming duty rate from April 2007 and was exacerbated by the weaker pound sterling.

Genting said its prospects for the current year were challenging as its performance would be impacted by various factors affecting its subsidiaries and business divisions.

It said Resorts’ management recognised that the worsening global economic situation would render the business environment challenging and expected consumer sentiment to be impacted by the slowing local economy which may affect visits to Genting Highlands Resort.

On its UK business, the company said the general economic outlook in the country was poor and had been made worse by recessionary fears and sharp declines in the main economic indicators.

It said in preparation for the opening of the integrated resort project in Singapore, Genting International would be incurring significant pre-opening costs in human resource recruitment, training, and sales and marketing programmes.

“Such costs are likely to be expensed in 2009 and therefore, would have a significant impact to the overall profit and loss results of Genting International in 2009,” it said.

On its power division, Genting said that while coal prices were expected to weaken in line with the continued slowdown of the global economy, the performance of the Meizhou Wan power plant could be affected by lower-than-expected tariff increases.