GGRAsia – Genting Malaysia posts net profit drop of 18 pct in 3Q

Genting Malaysia posts net profit drop of 18 pct in 3Q

Nov 24, 2014 Newsdesk Latest News, Rest of Asia, Top of the deck, World

Casino operator Genting Malaysia Bhd reported a drop in net profit of 17.5 percent in the third quarter of 2014 in comparison with one year earlier. The firm said the decrease was “mainly due to over provision of prior year’s deferred tax, which resulted in a lower tax charge in the third quarter of 2013”.

Excluding the impact of such deferred tax, the group’s gross profit would have decreased by 3 percent instead of 20 percent, Genting Malaysia said in a press release on Friday.

The group achieved total revenue of MYR2.2 billion (US$659 million) in the three months ended September 30, a 5-percent increase compared to the preceding year.

Genting Malaysia owns and operates several gaming properties around the world. Those include Malaysia’s Resorts World Genting, and Resorts World Casino New York City and Resorts World Bimini, both in the United States. The group also operates six casinos in London and 35 casinos in other U.K. areas.

Revenue from the Malaysian leisure and hospitality business declined 9 percent in year-on-year terms to MYR1.3 billion, mainly due to a lower hold percentage in the premium players business despite overall higher volume of business at casino resort Resorts World Genting (pictured, file photo).

“Although the upgrading and expansion works… [have] affected the number of visitors to Resorts World Genting , its core business continues to remain resilient,” the company said in a press release on Friday.

Genting Malaysia has recently re-opened the property’s arena after upgrading and maintenance works. A new hotel tower with 1,300 rooms is “on track” to open by mid 2015, the company said.

Genting Malaysia’s U.K. operations registered a 66 percent growth in revenue to MYR674.7 million primarily attributable to a higher hold percentage in its “international markets division” and an overall higher volume of business, the company said.

The international markets division cater to the premium players business at some of the company’s London casinos.

Revenue from the operations in the United States declined by 10 percent to MYR225.9 million. The company has plans to expand in the U.S market, with projects both in Las Vegas and New York – the latter are still waiting for regulatory approval.

The group reported adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of MYR574.9 million in the third quarter of 2014 versus MYR594.6 million in the prior-year period.

Genting Malaysia noted in the press release that regional gaming operators in Macau and Singapore recently reported a slowdown in gaming revenues. “The group is maintaining a cautious stance on the outlook in the near term, but remains positive on the longer term prospects of the leisure and hospitality industry,” it said.

Genting Malaysia is a subsidiary of Malaysia-conglomerate Genting Bhd, which has significant interests in leisure and hospitality, power generation, palm plantation, property development, biotechnology and oil and gas related activities. It also controls Genting Singapore Plc, the developer and owner of the Resorts World Sentosa casino resort in Singapore, which posted net profit of SGD127.1 million (US$98.2 million) for the third quarter of 2014, 43-percent down from a year earlier.