Genting’s first-quarter net profit surges to RM589mil

KUALA LUMPUR: Genting Bhd’s performance for the rest of 2024 hinges on global economic trends, potential risks, Malaysia’s economic growth and inflation factors, and positive prospects for regional gaming and tourism.

The gaming and hospitality group expects the global economy to remain resilient with modest growth but notes risks from geopolitical and economic shifts.

In Malaysia, economic expansion is likely to continue due to better external demand and local spending, although inflation will depend on domestic policies and financial markets.

“The operating environment for the regional gaming market is expected to continue improving, supported by the optimistic outlook on international tourism amid ongoing restoration in global capacity and air connectivity.

“Domestically, the continued implementation of tourism-related measures, such as the visa-free entry for citizens of China and India, are expected to contribute positively to the local tourism sector,” it said in a filing with Bursa Malaysia yesterday.

“Genting Malaysia Bhd (GenM) remains cautious of the near-term prospects of the leisure and hospitality industry, but remains positive in the longer term,” it added.

In the first quarter ended March 31 (1Q24), Genting’s net profit surged to RM588.9mil or an earnings per share (EPS) of 15.29 sen compared with RM98.04mil, or 2.55 sen, achieved in the same quarter last year.

The higher profit was mainly due to higher earnings before interest, tax, depreciation and amortisation (Ebitda), coupled with lower net finance cost, lower share of losses in joint ventures and associates and higher net gain on disposal of property, plant and equipment, partly offset by higher depreciation.

Group revenue rose 28% to RM7.43bil against RM5.82bil a year ago, contributed mainly by the leisure and hospitality division.

Its adjusted Ebitda for 1Q24 stood at RM2.57bil, up 40% compared with RM1.83bil in 1Q23.

Resorts World Sentosa recorded a higher revenue and Ebitda in 1Q24, benefiting from the increased visitorship and tourism spend during the Chinese New Year festive season, as well as from the relaxation of visa regulations between China and Singapore that took effect in February 2024.

Meanwhile, Resorts World Genting (RWG) recorded higher revenue in 1Q24 over 1Q23 mainly due to higher business volume from RWG’s gaming and non-gaming segments.

Consequently, a higher Ebitda was recorded primarily due to the higher revenue which was partially offset by higher operating expenses.

“The revenue from the leisure and hospitality businesses in the United Kingdom and Egypt in 1Q24 was higher due to a higher volume of business.

“A higher Ebitda was recorded mainly due to higher revenue, partially offset by higher payroll-related expenses,” Genting added.

The leisure and hospitality businesses in the United States and Bahamas included the financial results of Resorts World New York City (RWNYC), Resorts World Bimini (RW Bimini) and Resorts World Las Vegas.

Higher revenue was recorded by RWNYC and RW Bimini mainly due to improved operating performance.

Meanwhile, the plantation division’s revenue and Ebitda for the oil palm plantation segment were higher in 1Q24, underpinned by higher palm product prices which compensated for the impact of lower sales volume from the downstream manufacturing segment. The downstream manufacturing segment recorded a lower Ebitda owing to lower sales volume and margin deterioration.

Meanwhile, GenM posted a 311% year-on-year (y-o-y) jump in earnings to RM57.8mil or an EPS of 1.02 sen as revenue rose 21% y-o-y to RM2.76bil in 1Q24 driven by higher volume of business from Resorts World Genting’s gaming and non-gaming segments.