GGRAsia – GEN Malaysia has US$10mln profit 2Q, flags interim dividend

GEN Malaysia has US$10mln profit 2Q, flags interim dividend

Aug 25, 2023 Newsdesk Latest News, Rest of Asia, Top of the deck

Global casino operator Genting Malaysia Bhd swung to a second-quarter profit of MYR47.1 million (US$10.1 million), compared to a loss of nearly MYR10.9 million in the prior-year period.

But in a Thursday filing to Bursa Malaysia, the group – which has its flagship operation at Resorts World Genting (pictured), Malaysia’s only casino complex – said profit for the whole of the first half was only MYR19.7 million, due to a MYR27.4-million loss in the first quarter.

The first-half performance was a major improvement on first-half 2022’s nearly MYR137.4-million loss.

Maybank Investment Bank Bhd said in a Friday note: “Second-quarter core net profit of MYR120.8 million… brought six-month core net profit to MYR163.0 million… which was below our expectations at 24 percent of our full-year estimate.”

Analyst Samuel Yin Shao Yang added: “On closer inspection, the earnings shortfall was due to one-off repair and maintenance expenses and seasonally lower charters for its yacht subsumed under ‘others’” on the balance sheet.

Nonetheless the group – which also runs casinos in the United Kingdom, Egypt, the United States, and the Bahamas, as well as having links to another casino business in the U.S., Empire Resorts Inc – declared an interim single-tier dividend of MYR0.06 per ordinary share, payable on October 2.

“Genting Malaysia traditionally declares more dividend per share in the second half,” said Maybank. “We expect second-half dividend per share of MYR0.09.”

The brokerage added, referring to a tender process for downstate casino licensing in New York state in the U.S.: “We still believe that Genting Malaysia is in a good position to win a full casino licence in New York City in first half 2024.”

Second-quarter revenue rose 13.7 percent year-on-year, to MYR2.47 billion. The result took first half revenue to just under MYR4.76 billion, a 22.1-percent improvement on the same period in 2022.

The group’s second-quarter adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were MYR447.9 million, down 27.7 percent year-on-year. First-half adjusted EBITDA were almost flat, at MYR1.04 billion.

Genting Malaysia said second-quarter adjusted EBITDA included the impact of “unrealised foreign exchange translation losses” amounting to MYR260.9 million, on the group’s U.S.-dollar denominated borrowings, “due to the strengthening of the U.S. dollar” against the Malaysian ringgit.

Second-quarter revenue in the leisure and hospitality segment – including casino operations – was MYR2.40 billion, a 13.8 percent year-on-year improvement. Malaysian operations – including some non-gaming resort business as well as the casino at Genting Highlands – accounted for 63.9 percent of second-quarter leisure and hospitality revenue, or MYR1.53 billion.

For the whole of the first half, leisure and hospitality revenue for Genting Malaysia was up 22.0 percent year-on-year, at nearly MYR4.61 billion.

The firm said that in the second quarter it had a higher share of losses in associates, namely Genting Empire Resorts LLC, the holding company of Empire Resorts Inc, amounting to MYR30.1 million.

This was mainly due to “higher payroll costs and operating expenses incurred during the period”.

Genting Malaysia said it also recorded a higher share of losses in Empire Resorts following the increase in its effective ownership in the latter, “from 66.6 percent to 76.3 percent since fourth-quarter 2022”.