Ho Wah Genting Bhd’s (HWGB) financial performance in 2004 is expected to be boosted by a much bigger contribution from its casino operations in Cambodia and having its manufacturing division returning to the black.

The company has also put in place a five-year expansion plan for its casino business in Poipet, Cambodia, in view of the increased number of visitors.

Group executive chairman Goh Sin Huat said earnings from its casino business were expected to grow 15% to 20% this year and to account for up to 60% of the group pre-tax profit in the next three financial years.

Coupled with a better performance from its manufacturing business — which would be relocated to Batam, Indonesia, from Kulim, in the third quarter of 2004 — he said these developments would improve the group’s financial performance this year.

In view of the expected increase in punter traffic, Goh said the company plans to enlarge the casino business in phases over the next five years to correspond with such a rise in traffic.

The casino operations contributed RM14.8 million and RM37.14 million to the group’s pre-tax profit and revenue respectively for the period from April 11 to Dec 31 after HWGB completed the acquisition of the casino business last April.

Despite the contribution from the casino business, HWGB reported a much lower pre-tax profit of RM6.74 million for 2003 because of losses in the group’s wires and cables unit and investments. At net level, profits dropped to RM129,000 from RM1.98 million.

HWGB operates the casino via a 60% owned Ho Wah Genting Poipet Casino Resorts Co Ltd in Poipet, a town at the Cambodia-Thailand border or three hours’ drive from Bangkok. It is operating alongside its resort in a seven-storey leased building.

There are currently five other casino operators in Cambodia, namely Holiday Palace, Diamond, Tropicana, Star Vegas and Crown Princess.

HWGB managing director William Teoh said the casino’s punter traffic was expected to grow to more than 1,200-2,000 head counts daily, adding that its market share would improve to over 20%.

Given the competition from other casino operators, he added HWGB was aggressively tying up with regional tour operators to include the casino-cum-resort into their tour packages, and setting up representative offices in the region for promotions, marketing and publicity programmes.

It has recently set up a representative office in Kunming, China, besides those in Singapore and Bangkok, and is now considering such offices for Taiwan and Hong Kong. In Malaysia, it has offices in Kuala Lumpur, Penang and Johor Bahru.

On Singapore’s likely move to open up a casino, Teoh said it would not have much impact on HWGB’s punter traffic as Singaporeans accounted for only 5% of its visitors.

On its cable and wires manufacturing business, he said it would remain the group’s core business despite having been in the red. The relocation of its manufacturing business to Batam, he said, would reduce operating cost and increase profit margin.