GGRAsia – Genting Malaysia 2Q net profit down nearly 60pct

Genting Malaysia 2Q net profit down nearly 60pct

Aug 24, 2017 Newsdesk Latest News, Rest of Asia, Top of the deck

Net profit at Asian casino operator Genting Malaysia Bhd fell by 59.4 percent year-on-year in the second quarter of 2017, to approximately MYR193.4 million (US$45.2 million), compared to MYR476.4 million a year earlier. In a Thursday filing to Bursa Malaysia, the company cited unfavourable foreign exchange transactions and higher operating costs as reasons for the decline in profit.

The company recorded total revenue of MYR2.29 billion for the three months to June 30, up 2.5 percent compared to MYR2.23 billion in the prior-year period. Cost of sales for the period increased by 13.4 percent year-on-year, to MYR1.76 billion. Genting Malaysia also reported impairment losses of MYR36.8 million in the second quarter of 2017.

Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) declined by 19 percent year-on-year to MYR535.1 million, said Genting Malaysia.

“During the quarter, the group’s overall adjusted EBITDA was impacted by a foreign exchange translation loss on its U.S. dollars denominated assets,” the firm said on Thursday. “Excluding the effects of the foreign exchange, the group’s overall adjusted EBITDA for the second quarter of 2017 would have declined by 7 percent from last year,” it added.

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 2017 compared to the same period last year. Revenue for the period went up 7 percent to MYR1.45 billion.

“This was mainly due to an overall higher volume of business, aided significantly by the opening of new attractions at SkyPlaza in March 2017,” said the firm.

Adjusted EBITDA in Malaysia, however, was down 8 percent year-on-year as compared to the prior-year period, to MYR434.3 million. The decline “was largely due to additional operating costs from the ramping up of new facilities under the Genting Integrated Tourism Plan (GITP) and increased costs associated with the premium players business,” said the company, adding that the premium player segment “was also affected by a lower hold percentage”.

GITP is a multi-phase plan described by Genting Malaysia as a 10-year, MYR10-billion master plan for a major revamp for Resorts World Genting, which will include a theme park called 20th Century Fox World Malaysia.

In Thursday’s filing, 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. Such revenue was MYR384.9 million for the three months to June 30, up 9 percent from the prior-year period.

Adjusted EBITDA in the U.S. and Bahamas operations nearly doubled to MYR92.8 million, “mainly driven by higher revenue and narrowing operating losses for the Bimini operations in Bahamas,” said the company.

In contrast, the firm’s operations in the United Kingdom saw lower revenue and adjusted EBITDA, down 18 percent and 57.1 percent respectively. Genting Malaysia said that was “mainly attributable to overall lower volume of business and lower hold percentage from the premium segment of its casino business,” as well as “unfavourable foreign exchange movements”.

Genting Malaysia’s board declared on Thursday an interim dividend of MYR0.040 per share, compared to an interim dividend of MYR0.030 declared a year earlier.