GGRAsia – Genting Malaysia net profit more than doubles in 2Q

Genting Malaysia net profit more than doubles in 2Q

Aug 26, 2016 Newsdesk Latest News, Rest of Asia, Top of the deck

Net profit at Asian casino operator Genting Malaysia Bhd more than doubled in the second quarter compared to the prior-year period, helped by strong results in its U.K. casino operations, the firm announced on Thursday. Such profit for the April to June period was MYR465.3 million (US$115.9 million), up 108 percent year-on-year.

The company said in a press release it had achieved “strong group performance” in the second quarter of 2016, “despite a challenging operating environment”.

Total revenue increased by 13 percent to MYR2.23 billion as compared to the same quarter last year, Genting Malaysia said.

Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) grew by 52 percent to MYR662.2 million. Profit before tax was up 89 percent in year-on-year terms to MYR512.1 million.

Genting Malaysia’s total revenue for the first six months of 2016 grew by 9 percent year-on-year to MYR4.45 billion. Adjusted EBITDA for the period increased by 6 percent, to MYR1.11 billion. Net profit was up 5 percent year-on-year at MYR609.4 million.

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

Judged market by market, Genting Malaysia achieved higher revenue in Malaysia during the second quarter of 2016 compared to the same period last year. Revenue for the period went up 4 percent to MYR1.35 billion.

“This was mainly contributed by an improved hold percentage, which is in line with expectation, for the mid to premium segment of the business even though business volumes were lower,” the firm stated in its release.

Genting Malaysia said that revenue was up in year-on-year terms both at Resorts World Casino New York City, in the United States, and at Resorts World Bimini, in the Bahamas.

In the United Kingdom, Genting Malaysia reported a jump in revenue of 71 percent in year-on-year terms to MYR504.2 million, “mainly contributed by the international premium players business,” the firm said.

The company added: “The better performance for this business segment was a result of revised marketing strategies adopted.”

Expansion plan

Genting Malaysia stated it remained focused on the development of its Genting Integrated Tourism Plan (GITP), which aims to upgrade the Resorts World Genting complex in Malaysia.

“Pre-opening activities continue to ramp up as the group prepares for the opening of the various GITP attractions and facilities in stages, commencing before the end of the year,” the firm stated.

In February, Genting Malaysia had announced that it would be doubling the investment under the plan.

“Meanwhile, the group remains committed to optimising its operational efficiencies, yield management systems and database marketing efforts as well as enhancing customer service at Resorts World Genting,” the casino operator added.

Investment bank Morgan Stanley stated in a note in June that Resorts World Genting was unlikely to be negatively affected by any oversupply of casino gaming in the region.

Looking ahead, Genting Malaysia stated: “The global economy is expected to remain challenging given the uncertainty over the pace of recovery in major economies as well as the impact of United Kingdom’s exit from the European Union. In Malaysia, domestic demand is expected to continue to be the main growth driver for the economy.”

The firm added: “The group remains cautious on the near term outlook of the leisure and hospitality industry, but is positive on the longer term outlook.”

Genting Malaysia’s board declared on Thursday an interim dividend of MYR0.030 per share, compared to an interim dividend of MYR0.028 declared a year earlier.