Casino operator Genting Malaysia Bhd reported a 45-percent drop in net profit in the second quarter of 2014, the company announced on Thursday.
The group recorded total revenue of MYR1.9 billion (US$602 million) for the period compared to MYR2.2 billion in the corresponding quarter in the preceding year. Net profit was MYR254.4 million for the three months ended June 30, down from MYR460.4 million one year earlier.
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.
The firm told Bursa Malaysia in a filing that revenue from the Malaysian leisure and hospitality business declined 12 percent to MYR1.3 billion primarily due to a lower hold percentage in the premium players business. Ongoing work to upgrade and expand Resorts World Genting resulted in lower visitor numbers to the resort, the core business “remains resilient”, the company said.
Revenue from the United Kingdom operations of MYR301.5 million was 41 percent lower in year-on-year terms due to a lower hold percentage and volume of business, mainly at the London casinos. Construction and development of Resorts World Birmingham continues and it is expected to open in the second quarter of 2015, the firm said.
The operations in the United States generated an 11 percent revenue increase to MYR253.0 million primarily due to the inclusion of revenue from the Bimini operations this quarter.
The Group also reported higher investment income due to dividend income of MYR46.8 million from the group’s investment in Genting Hong Kong Ltd, which announced its results last week. Genting Hong Kong is a joint venture partner in the Resorts World Manila casino resort in the Philippines, and also runs casino cruise ships under the Star Cruises brand.
Genting Malaysia achieved adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of MYR460.5 million in the second quarter, down by 36 percent in year-on-year terms.
The firm declared an interim single-tier dividend of MYR0.03 per ordinary share in respect of the financial year ending December 31, 2014. The interim dividend declared for the previous year’s corresponding period was MYR0.043 per ordinary share.
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 posted net profit of SGD131.7 million (US$106 million) for the second quarter of 2014, 22-percent down from a year earlier.
Genting Malaysia’s lower earnings impacted the results of its parent, also announced on Thursday. Genting Bhd reported a 20 percent fall in second-quarter net profit to MYR372.0 million in the April-June period from MYR466.3 million in the same quarter a year earlier.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia