Genting Malaysia reported a 17% year-on-year decline in Adjusted EBITDA to MYR621.5 million (US$140 million) from its global leisure and hospitality operations – and a 79% decline in group-wide Adjusted EBITDA to MYR180.6 million (US$41 million) – in 4Q24 as rising payroll costs, tighter margins and foreign exchange losses hit the company’s bottom line. Group-wide revenue in the sector fell very slightly to MYR2.69 billion (US$605 million).
The disappointing result, which missed consensus, saw Genting Malaysia declare a final dividend of 4sen per share – less than half the 9sen per share declared a year earlier. Nomura analysts described the dividend cut as a “negative surprise” and attributed the decision to a need to hold cash for capex opportunities.
While the largest impact on Genting Malaysia’s bottom line came from growing losses from associate Empire Resorts, which operates the company’s New York assets, plus high depreciation and finance costs, there was also a slight decline in revenues at Malaysian flagship Resorts World Genting (RWG), down 1% year-on-year to MYR1.78 billion (US$401 million).
Adjusted EBITDA at RWG fell 7% to MYR490.4 million (US$110 million) on higher operating expenses.
Revenue in the US and Bahamas also fell by 1% to MYR461.7 million (US$104 million) although the UK and Egypt booked a 4% increase in revenue to MYR446.4 million (US$100 million).
Nomura’s Tushar Mohata and Alpa Aggarwal noted that margins declined in all key markets due to “higher payroll costs (especially in the UK and the US) and EBITDA margin compression in Malaysia to 27.6%.”
For all of 2024 combined, Genting Malaysia reported a 7% increase in revenue from its leisure and hospitality operations to MYR10.7 billion (US$2.41 billion), while Adjusted EBITDA grew by 1% to MYR2.92 billion (US$657 million). However, profit before taxation fell by 28% to MYR486.7 million (US$110 million) – impacted by an MYR368.2 million (US$83 million) loss in Q4.
Addressing its results, Genting Malaysia said it remains “cautiously optimistic of the near-term prospects of the leisure and hospitality industry and remains positive in the longer-term.”
It added, “The group remains focused on strengthening its yielding capabilities, enhancing operational efficiencies and leveraging database marketing to optimise performance. Efforts will also be directed toward refining marketing strategies to increase visitation at RWG, whilst maintaining a diverse range of offerings that deliver maximum value to guests. Additionally, the Group will continue to place emphasis on effective cost management to maintain resilience and ensure business agility in an evolving operating environment.
“Ongoing investments in infrastructure upgrades and new attractions at Genting Highlands, including new ecotourism experiences set to launch this year, will further elevate the group’s offerings.
“To celebrate the Genting Group’s 60th anniversary, a series of promotional events and activities will be introduced throughout the year to attract more visitors to RWG.”
