Genting Singapore Ltd tumbled the most in four years after a surprise increase in impairments dragged on the resort operator’s fourth-quarter earnings.

The shares slid as much as 10% on Friday, the most since March 2020, after the company reported adjusted earnings before interest, taxes, depreciation, and amortisation of S$228 million (US$170 million or RM810.43 million), a 34% drop from the previous quarter. That trimmed a rebound in the stock price since an October trough to just 13%.

“One of the negative surprises came from the S$92 million bad debt provision in the second half of the year,” and the “resulting lower-than-expected net profit has led to the board’s decision to declare a final dividend of only two Singapore cents per share”, which was unchanged from the previous year, Citigroup Inc analysts including George Choi wrote in a note.

Still, analysts are positive on Genting Singapore’s outlook, as the operator of Resorts World Sentosa benefits from the ongoing revival in regional travel and gaming demand. The firm will likely be one of the major beneficiaries from the recently announced Singapore-China visa-free arrangement and the “solid event line-up” in Singapore, Citigroup noted, maintaining its 'buy' rating for the stock.

“Notwithstanding a likely negative knee-jerk reaction, we don’t feel the equity story of Genting Singapore is changing,” JPMorgan Chase & Co analysts including DS Kim wrote in a note. The brokerage remains 'overweight' on the stock, and asked clients to use any pullback to “accumulate this quality asset at a good price”.

At the time of writing on Friday, Genting Singapore had pared losses at 94 Singapore cents, still down by nine cents or 8.74%. 

  - Bloomberg