GGRAsia – GEN Malaysia 1Q rev up 21pct y-o-y, posts US$8mln profit

GEN Malaysia 1Q rev up 21pct y-o-y, posts US$8mln profit

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

Global casino operator Genting Malaysia Bhd reported first-quarter net profit of just under MYR36.7 million (US$7.8 million), compared with a net loss of MYR45.4 million a year earlier. Judged sequentially, net profit was down 83.1 percent, according to a Thursday filing to Bursa Malaysia.

The group’s performance in the fourth quarter of 2023 had been aided by net foreign exchange gains of MYR130.4 million.

Revenue in the three months to March 31 was just above MYR2.76 billion, up 21.1 percent from a year ago, but down 1.6 percent quarter-on-quarter.

Genting Malaysia operates Resorts World Genting (pictured in a file photo), Malaysia’s only licensed casino property. The group also runs casinos in the United States, the Bahamas, the United Kingdom, and Egypt.

The group’s first-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were MYR654.1 million, a 10.3-percent increase from a year earlier, but a 22.4-percent decline sequentially.

“The group’s overall adjusted EBITDA in first-quarter 2024 includes the impact of net unrealised foreign exchange translation losses of MYR130.0 million on the group’s U.S. dollar denominated borrowings as compared to net unrealised foreign exchange translation losses of MYR39.0 million in first-quarter 2023,” said Genting Malaysia.

Excluding the impact of foreign exchange losses, the group’s first-quarter adjusted EBITDA would have increased by circa 24 percent year-on-year, it added.

Revenue in the leisure and hospitality segment – including casino operations – was MYR2.70 billion in the opening quarter of 2024, a 22.3 percent year-on-year improvement. The figure was flat quarter-on-quarter.

Malaysian operations – including some non-gaming resort business as well as the casino at Genting Highlands – accounted for MYR1.75 billion of first-quarter leisure and hospitality revenue, up 24.7 percent year-on-year.

The Malaysia operation’s quarterly adjusted EBITDA stood at MYR583.6 million, up 33.7 percent from a year earlier, and a 10.2-percent increase quarter-on-quarter.

Genting Malaysia said the “operational profitability” of the group’s leisure and hospitality business “continues to exceed pre-pandemic levels”.

The company said the higher revenue recorded in the leisure and hospitality operations in Malaysia in the first three months of 2024 was mainly “attributable to overall higher volume of business from Resorts World Genting’s gaming and non-gaming segments”.

Adjusted EBITDA in the group’s Malaysian operations “also grew … despite higher operating expenses incurred as a result of the business ramp up,” stated the filing.

Nonetheless, Genting Malaysia said it remained “cautious” on the near-term outlook of the leisure and hospitality industry, but “positive” in the longer-term.

“In Malaysia, the group will continue to leverage technologies to enhance its yielding capabilities, as well as improve its overall operational efficiencies and productivity,” stated the casino group.

It added: “The group also remains committed to optimising cost management measures to strengthen its resilience.”

In a bid to drive growth in “key business segments,” Genting Malaysia said it would “continue to implement innovative marketing approaches to broaden customer outreach whilst capitalising on its value propositions”.

During the reporting period, the casino group confirmed the “temporary” closure of the Circus Palace and Hollywood gaming zones at Resorts World Genting, in order to “facilitate improvements” to the property.

In March, Maybank Investment Bank Bhd said it expected Genting Malaysia’s revenue in 2024 to rise by only 1.7 percent year-on-year, due to the closure – possibly for at least nine months – of the two mass-market gaming floors at the complex.