Genting Malaysia Berhad reported a 22% increase in revenues to MYR2.71 billion (US$577 million) from its leisure and hospitality operations in 1Q24, with its three segments – Malaysia, UK and Egypt, and the US and Bahamas – all showing strong year-on-year growth.
The company’s Malaysian flagship, Resorts World Genting, led the way as usual, with revenues rising 25% year-on-year to MYR1.75 billion (US$373 million), although this was down 3% versus the December 2023 quarter.
The UK and Egypt was up 26% year-on-year and 3% sequentially to MYR442.4 million (US$94 million) while the US and Bahamas grew 13% year-on-year and 11% sequentially to MYR518.4 million (US$110 million).
Group-wide Adjusted EBITDA of MYR654.1 million (US$139 million) was 10% higher year-on-year but down 22% quarter-on-quarter, with the company citing an MYR130 million (US$28 million) foreign exchange loss on its USD denominated borrowings. Excluding the impact of foreign exchange, the group’s adjusted EBITDA increased by 24% year-on-year, it said.
In a note, Nomura analysts Tushar Muhata and Alpa Aggarwal observed that bottom-line level net income was MYR243 million (US$52 million) – up 31% quarter-on-quarter and driven by unexpected EBITDA margin improvement in Malaysia and revenue growth in the US due to higher wins per machine.
However, EBITDA margins at Resorts World Genting are tipped to compress throughout the remainder of 2024 on cost normalization, the impact of a tax hike and the recent closure of two of its three casino floors for upgrade works.
Addressing its short-term outlook, Genting Malaysia said it expects the operating environment for the regional gaming market 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, is expected to contribute positively to the local tourism sector,” it said.
“The Group remains cautious of the near-term prospects of the leisure and hospitality industry but remains positive in the longer-term.”
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