Company Overview of Domestic Direct Competitors of Sime Darby (Genting Berhad)

Topics: Genting Group, Genting Highlands, Lim Goh Tong Pages: 5 (1600 words) Published: November 27, 2012
COMPANY OVERVIEW OF DOMESTIC DIRECT COMPETITORS OF SIME DARBY (GENTING BERHAD) Genting Berhad (Genting), a holding company for the Genting Group, operates resorts, casino and plantations. It also develops properties, manufactures paper and generates electricity. The company primarily operates in Malaysia. It is headquartered in Kuala Lumpur, Malaysia and employs 36,000people. The company recorded revenues of MYR6,943.8 million (approximately $1,968.3 million) during the fiscal year ended December 2006, an increase of 27.3% over 2005.The operating profit of the company was MYR3,124.6 million (approximately $885.7 million) during fiscal year 2006, an increase of 22.7% over 2005.The net profit was MYR2,242.5 million in fiscal year 2006, an increase of 23.8%over 2005. SWOT ANALYSIS

Genting is the management and investment holding company of Genting Group. Through its subsidiaries, the company provides leisure and hospitality, cruise and entertainment businesses. Genting also operates plantations, develops and manages property, power generation, manufactures and trades paper, explores oil and gas and provides tours and travel related services. The continued success of its leisure and hospitality business, driven by a strong performance from Genting Highlands Resort and its gaming business, has improved overall revenue and profit growth for the company. However, regional competition from new leisure attractions such as Disneyland and Macau's strong position in the gaming business could weaken the company's leisure and hospitality business. Strengths

Diverse business portfolio
Strong leisure and hospitality division
Strong performance of oil and gasWeaknesses
Weak performance of property and manufacturing divisions •Weak returns
Growing wealth of Asian population
Government initiatives to promote Malaysia
Strong outlook for China’s energy sector
Rising demand for biodieselThreats
Intense competition
Natural disasters and epidemics
Weakening demand for residential housing

Diverse business portfolio
Genting has a diversified business portfolio, which includes the management of casinos and resorts, plantations, property development, paper manufacturing and power generation. Aided by strong growth in most of its business divisions in fiscal year 2006, Genting managed to record an increase of 27.3% in its revenues over fiscal year 2005. The revenues from leisure and hospitality division increased 20.9%; power 89.1%; plantation 10%;and oil and gas 19.8%.The company is not overly dependent on any one product or business division. Its diversified business portfolio protects it from downturns in any particular division and reduces business risk. •Strong leisure and hospitality division

The company's leisure and hospitality division has continuously contributed the highest revenues for Genting. The leisure and hospitality division operates the company's hotel, gaming and entertainment businesses. In fiscal year 2006, the division recorded revenues of MYR4,286.9 million(approximately $1,215.2 million), contributing 61.7% to the company's revenues. This increase is mainly due to the higher volume of business from Genting Highlands Resort. For the period 2002-2006, the leisure and hospitality division grew at a CAGR of 12%. The division's strong performance is attributed to the overall success of the company's theme resorts which are becoming Malaysia’s leading tourist destinations. The company's gaming business, which operates its casinos both locally and internationally, has also posted strong results in recent years. Strong performance from the leisure and hospitality division has improved overall revenue and profit growth for Genting. •Strong performance of oil and gas

Revenues for the oil and gas division of Genting have consistently improved in recent years. Although the division contributed just 2% to Genting’s revenues in fiscal year 2006, it recorded...
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