GGRAsia – GEN Highlands still mulls old mass floor relaunch: Maybank

GEN Highlands still mulls old mass floor relaunch: Maybank

Aug 30, 2024 Newsdesk Latest News, Rest of Asia, Top of the deck

Genting Malaysia Bhd has “not decided when its old mass gaming floors will reopen” post their revamp at its flagship and Malaysia-monopoly casino complex Resorts World Genting (pictiured in a file photo).

That is according to Maybank Investment Bank Bhd, citing guidance from management, in a note following the global casino group’s second-quarter results issued to Bursa Malaysia on Thursday.

Analyst Samuel Yin Shao Yang stated: “Genting Malaysia has not decided when its old mass gaming floors will reopen.”

He added: “Our earnings estimates are premised on them reopening in December 2024 to capitalise on the year-end holidays.”

Resorts World Genting has attractions for families as well as for gamblers, including an outdoor theme park.

The plan to close on a “temporary” basis the Circus Palace and Hollywood gaming zones at the Genting Highlands property to “facilitate improvements” was disclosed shortly before it happened, in late February.

In other commentary regarding the specifics of Genting Malaysia’s results, Maybank stated: “Positively, the negative impact of the sales and service tax hike has been tepid.”

Second-quarter earnings before interest, taxation, depreciation, and amortisation (EBITDA) “eased only 6 percent quarter-on-quarter due to, we gather, seasonally slower spending at Resorts World Genting coupled with full quarter impact of the increase in sales and service tax to 8 percent from 6 percent,” the institution added.

Maybank further observed the tax change “seems to have compressed Resorts world Genting EBITDA margin by only 1 percentage point, to 32.5 percent”.

Malaysia’s government increased from March 1 this year the country’s service tax rate to 8 percent from 6 percent. It is applicable to all services not specifically included on an exemption list, according to the website of the Royal Malaysian Customs Department.

Analyst Mr Yin said that although Genting Malaysia’s declared interim dividend of MYR0.06 (circa US$0.0139) per share, “accounted for only 40 percent of our full-year estimate,” on dividend payout “we deem it within our expectations as Genting Malaysia traditionally declares a larger dividend per share in the fourth quarter”.