Genting SP

Industry observers expect more Asian casino operators to hike their dividend payouts even as they continue investing in their properties.

Will Genting SP soon start paying a dividend too? Observers said that Genting certainly appears to have the financial capacity to pay put dividend. Its cash flow in 2011 was well in excess of S$1 billion and its capex needs were only about S$500 million. Part of that money went towards two non gaming developments.

Under the company’s existing debt covenants, however, there are restrictions on dividend distribution unless certain criteria are met. As a result, most are expecting the company will start paying out dividends only from 2013. There is a chance that Genting SP may pay a small dividend.

The flip side of Asian gaming companies upping their the dividend payouts is that they are perhaps not funding sufficient outlets to invest their cash flow, leading some market watchers to wonder whether their high growth phase is now (Feb 2012) coming to end.

In fact, even as its net cash position starts to build up, Genting SP may well decide to put off a significant dividend payout to conserve its bullet for new investment opportunities.

For 2012, the gaming is looking towards Japan , where it hopes that the government will give the green light for the country’s first ever casinos.

Meanwhile gambling has been legalised in the offshore islands of Taiwan , and casino companies are sniffing arounf for a viable first venture on one of the islands closest to China . Genting SP is actively pitching for potential casino projects in North Asia .