Genting Malaysia posts net profit of US$37.9m for Q3

The figure was up 276.6 per cent in quarter-on-quarter terms.

Malaysia.- Genting Malaysia has shared its financial results for the third quarter of the year. The casino operator posted a net profit of MYR177.4m (US$37.9m), compared to a profit of MYR11.4m last year. The figure was up 276.6 per cent in quarter-on-quarter terms.

Revenue was up 19.3 per cent year-on-year to MYR2.71bn and up 9.7 per cent in quarter-on-quarter terms. Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) was up 22.6 per cent year-on-year to MYR747.6m and up 66.9 per cent when compared to the previous quarter.

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Revenue in the leisure and hospitality segment – including casino operations was MYR2.65bn, up 19.6 per cent year-on-year. The figure was up 10.5 per cent in quarter-on-quarter terms.

Malaysian operations contributed MYR1.68bn to the leisure and hospitality revenue, with the quarterly adjusted EBITDA standing at MYR563.9m, a 26.7 per cent year-on-year increase and a 5.9 per cent sequential rise.

While acknowledging the positive outlook for international tourism, Genting Malaysia expressed caution regarding the near-term outlook for the leisure and hospitality industry. The company emphasised its commitment to strengthening business resilience in the face of a challenging operating environment in Malaysia, focusing on optimising yield management, database marketing efforts and ongoing development at Resorts World Genting (RWG).

Maybank cuts Genting Malaysia’s earnings forecast

Analysts at Maybank Investment Bank have adjusted their earnings forecasts for Genting Malaysia due to a 2 per cent rise in service tax in the country. They have made a 4 per cent reduction in the 2024 core net profit forecast and a 5 per cent decrease for 2025. 

Maybank’s revision the estimated core net profit at MYR913m (US$191.7m) for the upcoming year and MYR1.01bn for 2025. Analyst Samuel Yin Shao Yang said the service tax increase essentially translates into a gaming tax hike specifically for Resorts World Genting.

The Malaysian government has announced a raise in the service tax rate from 6 to 8 per cent from March 1, 2024. Shao Yang said Genting Malaysia’ has potential remedies. It could consider measures such as reducing junket commission rates or direct VIP rebate rates, raising hotel room rates, delaying salary increments, and adopting more efficient water and energy consumption practices to mitigate the impact.