Genting FY16 earnings jump to over RM2b

Genting helped the FBM KLCI close higher on Friday.

UALA LUMPUR: Genting Bhd's earnings jumped to over RM2bil for the financial year ended Dec 31, 2016 boosted by a one-off gain in the fourth quarter from the disposal of the group's investment in Genting Hong Kong Ltd.

It reported on Thursday that FY16 earnings jumped 54.6% to RM2.146bil from RM1.388bil a year ago. Revenue was higher by 1.4% at RM18.36bil from RM18.10bil.

“Profit before tax in FY16 was RM5.52bil compared with RM3.44bil in FY2015. The increase was due mainly to the one-off gain of approximately RM1.3bil arising from the disposal of Genting HK,” it said.

In the fourth quarter, its earnings surged 237% to RM1.14bil from RM3238.94mil in Q4, FY15, due to the disposal of Genting HK. Revenue slipped slightly to RM4.753bil from RM4.919bil.

Earnings per share rose to 30.71 sen from 9.12 sen. 

The board of directors recommended a final single-tier dividend of six sen per share for FY2016. It also declared a special single-tier dividend of 6.5 sen per share. 

Commenting on the Q4 FY16 results, Genting said higher revenue from Resorts World Sentosa (RWS) in 4Q16 was largely contributed by higher gaming revenue as a result of higher rolling win percentage in the premium player business and the revised strategy to focus on better margin business. 

Consequently, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) improved compared with 4Q15. 

“Increased revenue from Resorts World Genting (RWG) in Malaysia was due mainly to higher business volume from the mid to premium segment of the business. The higher revenue and lower costs relating to the premium players business contributed to higher EBITDA in 4Q16,” it said.
 
As for the casino business in the United Kingdom, revenue fell due mainly to the weaker pound sterling  exchange rate to the Ringgit during 4Q16. 

However, this was partially offset by higher volume of business from its non-premium players business as well as higher contribution from Resorts World Birmingham. However, its EBITDA was marginally higher than that of 4Q15. 

As for revenue from the leisure and hospitality business in the US and Bahamas, there was a decline due mainly to lower volume of business and lower hold percentage from the operations of Resorts World Bimini in Bahamas (Bimini operations). EBITDA increased in 4Q16 due mainly to net reversal of expenses over-accrued in previous periods partially offset by the lower revenue. 

The plantations business performed better. Revenue and EBITDA from its Malaysia and Indonesia operations increased in Q4, FY16 due mainly to stronger palm product selling prices and higher fresh fruit bunches (FFB) production from Plantation-Indonesia which outstripped the decline in FFB production in Malaysia.