UPDATE 1-Malaysia's Genting post Q3 loss

* Q3 net loss of 40.38 mln ringgit, from 275.23 mln

* Q3 hit by higher bad debts and coal costs, forex losses

* Says prospects for Q4 are challenging

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KUALA LUMPUR, Nov 27 (Reuters) - Malaysian conglomerate Genting (GENT.KL) on Thursday posted a third-quarter loss, the result hit by higher bad debts, forex losses at its UK casino operations and higher coal costs at its China power plant.

Malaysia's sole casino operator suffered a net loss of 40.38 million ringgit ($11.15 million) in the July-September quarter, compared with 275.23 million in the year-earlier period.

"The growth in profit from the core divisions was in line with the respective revenue growth with the exception of the UK casino operations," it said.

Prospects for the fourth quarter were challenging, with the economic outlook in the UK likely to impact its casino operations there, it said.

Genting said the higher coal costs at its Meizhou Wan power plant had sharply reduced the pretax profit of its power division to 5.5 million ringgit, from 123.2 million.

It said reduced demand for electricity and lower tariff rates would hit its power division, while the contribution from its core plantation sector would fall in the next quarter due to lower palm oil prices.

Genting is expected to post a net profit of 1.48 billion ringgit or 38.64 sen a share for fiscal 2008, compared with 1.99 billion ringgit or 53.6 sen in the year-earlier period. Malaysian analysts do not provide quarterly forecasts.

Genting, which owns UK casino chain Stanley Leisure, is building a casino resort in neighbouring Singapore. The S$6 billion casino is scheduled for a soft launch in first-quarter 2010.

A global economic slowdown will hit Genting hard. The company has already warned of a grim outlook for its UK casino business, while weakening consumer sentiment at home could also hit tourist arrivals at Genting Highland Resort, the larger earnings contributor for the group.

Its plantation operations, housed under Asiatic Development ASIA.KL, are expected to report lower earnings in fiscal 2009 due to falling crude palm oil prices.

Genting shares dropped 6.3 percent in the July to September period, outperforming the broader market's .KLSE 14 percent loss.

The stock closed down 1.77 percent at 4.44 ringgit on Thursday. (Reporting by Jalil Hamid and Soo Ai Peng; Editing by Andrew Macdonald) ($1=3.620 Malaysian Ringgit)