GGRAsia – Casino operator Genting Malaysia 3Q profit down 65 pct

Casino operator Genting Malaysia 3Q profit down 65 pct

Nov 24, 2017 Newsdesk Latest News, Rest of Asia, Top of the deck

Third-quarter profit at casino operator Genting Malaysia Bhd fell 65.2 percent year-on-year, the company said in a Thursday filing to Bursa Malaysia. Such profit was MYR193.4 million (US$47.0 million), compared to MYR555.7 million a year earlier.

Profit for the nine months to September 30 was MYR710.3 million, compared to a profit of MYR1.19 billion in the prior-year period.

Basic and diluted earnings per share in the third quarter were MYR3.41.

Genting Malaysia runs Resorts World Genting (pictured), Malaysia’s only casino resort, and operates casinos in the United States, the Bahamas and the United Kingdom.

The firm said in commentary in its latest results: “The Malaysian leisure and hospitality business reported lower revenue in third-quarter 2017 despite higher volume of business aided by the opening of new attractions and facilities under the Genting Integrated Tourism Plan (GITP). This was primarily due to lower hold percentage in the mid to premium players business segment.”

The company added: “This segment’s lower adjusted EBITDA [earnings before interest, taxation, depreciation and amortisation] for third-quarter 2017 was attributable to high operating costs and a decline in revenue. The group also incurred additional operating expenses from the ramping up of new facilities under GITP.”

The GITP is a multi-phase initiative described as a 10-year, MYR10-billion master plan for a major revamp for Resorts World Genting. Genting Malaysia said on Thursday that it is “looking forward to the roll out” of the 20th Century Fox World Theme Park, as well as the new indoor theme park in 2018, as part of the GITP.

Japanese brokerage Nomura said in a Friday note: “Genting Malaysia’s third-quarter 2017 results were a miss, with adjusted EBITDA down 19 percent quarter-on-quarter and Malaysia adjusted EBITDA margin of approximately 25 percent.”

The institution’s analysts Tushar Mohata and Alpa Aggarwal also noted: “The main reason for the miss was a below-theoretical win rate in the VIP business in Malaysia (we estimate approximately 2.2 percent); [otherwise] hold-adjusted Malaysia revenue and EBITDA would have increased 17 percent year-on-year each, based on our calculations.”

Genting Malaysia’s third-quarter total revenue grew by 3 percent year-on-year, to MYR2.27 billion. But adjusted EBITDA for the period fell 25 percent year-on-year, to MYR437.9 million, compared to MYR482.7 million a year earlier.

Adjusted EBITDA in the leisure and hospitality segment in Malaysia fell 32.4 percent year-on-year, to MYR336.0 million, compared to MYR497.3 million a year earlier. Adjusted EBITDA in United Kingdom operations rose 28 percent year-on-year, to MYR53.8 million, while that from the United States and the Bahamas rose 181.1 percent year-on-year, to MYR59.6 million.

The firm said the adjusted EBITDA improvement in the latter two markets was “mainly from favourable foreign exchange movement and higher revenue contribution from Resorts World New York City”.

It also noted regarding Resorts World Bimini in the Bahamas: “The group registered lower operating losses on its Bimini operations which contributed to the overall increase in adjusted EBITDA.”