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Malaysia – Genting Malaysia moves back into profit but revenues still lag 2019’s figures

By - 26 May 2023

Genting Malaysia, operator of Resorts World Genting in the Malaysia highlnads, has seen a 33 per cent year-on-year lift in revenue for the three months to 31 March 2023, although quarter by quarter they fell due to a slower than anticipated return of international players.

The operator also reported a pre-tax profit of RM41.3m, compared to a pre-tax loss of RM116.1m in the same quarter last year ‘mainly due to deferred tax provisions recognised in the quarter.’

It added: “Notwithstanding, the group’s net loss narrowed by 69 per cent from 1Q22.”

Revenue came in at MYR2.28bn (US$493m) with Resorts World Genting generating MYR1.40bn (US$303m) up 42 per cent, compared to last year but down 12 per cent from the last quarter. The company’s casinos in the US and Bahamas improved by 29 per cent with revenues reaching MYR460.7m (US$100m) but revenues from the UK and Egypt dropped by 11 per cent to MYR352.5m (US$76m) due to the impact of ongoing inflation.

Genting Malaysia said revenues would ‘continue to be supported by domestic demand.’

It explained: “The group’s adjusted earnings before interest, tax, depreciation and amortisation (ebitda) for 1Q23 of RM1.8bn, improved by 41 per cent compared with RM1.3bn in 1Q22. Resorts World Genting (RWG) recorded higher revenue in 1Q23 mainly due to higher business volume following further relaxation of Covid-19 restrictions and the reopening of national borders since April 1, 2022. Consequently, the ebitda increased but was partially offset by higher operating expenses in 1Q23.”

It added: “These improvements were primarily attributable to overall higher volume of business registered at RWG following the lifting of pandemic-related restrictions and the reopening of the national borders since April 1, 2022. As a result of the ramp up of the group’s operations, the group incurred higher operating expenses in 1Q23. However, downside risks continue to predominate amid ongoing geopolitical tensions and concerns surrounding the impact from monetary policy decisions.”

“While Malaysia’s economic expansion is expected to moderate in line with a slower global economy, growth will continue to be supported by domestic demand.”

It added: “International travel demand is expected to remain positive, although its recovery could be constrained by the macroeconomic uncertainties and inflationary pressures. The regional gaming market is expected to continue improving in tandem with the improved outlook on global travel. The Group continues to be cautiously optimistic on the near-term outlook of the leisure and hospitality industry and remains positive in the longer-term.”

Nomura analysts Tushar Mohata and Alpa Aggarwal said: “Management still faces shortage of permanent laborers and needs to hire temporary staff for peak timings to open up more tables. Capacity at RWG has still not reached 2019 levels but it has also increased electronic gaming machines (ETGs) as a proportion of total tables.”

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