PETALING JAYA: GENTING BHD has posted a 56.36% jump in net profit to RM599.68mil for the second quarter to end-June on the back of improved earnings from its gaming, leisure and hospitality, plantation and power segments.
Revenue rose 12.9% to RM5.45bil, where contributions from Resorts World Sentosa, Resorts World Genting (RWG), leisure and hospitality businesses in the United States and Bahamas, and the group’s plantation and power divisions saw a rise in contribution.
The group’s performance for the first-half recorded a 17.75% rise in net profit to RM1.16bil, while revenue jumped 9.38% to RM11.02bil.
Meanwhile, Genting Malaysia Bhd, which comes under Genting, saw a 5.25% jump in net profit to RM416.48mil for the second quarter to end-June, on the back of an improved hold percentage in the mid to premium players segment.
This was despite an overall decline in business volume for the gaming segment, primarily due to lower incentives offered to customers in line with the group’s cost-rationalisation initiatives.
The improved earnings were also aided by a reversal of provision for contract termination-related costs of RM60.2mil in relation to the outdoor theme park at RWG, following the finalisation of claims from certain contractors by the group. Revenue for the quarter also rose 7.41% to RM2.6bil, mainly due to Genting Malaysia’s 10% increase in the revenue of the leisure and hospitality businesses in Malaysia and the United States of RM162.4mil and RM33.4mil, respectively. It said in its filing with Bursa Malaysia yesterday that the opening of new attractions under the Genting Integrated Tourism Plan (GITP) has been well received and contributed to a significant increase in non-gaming revenue.
The group’s first half performance, on the other hand, showed a 9.17% dip in net profit to RM684.77mil due to several reasons, such as the higher pre-opening expenses of RM112.4mil, mainly due to the provision of termination-related costs for the outdoor theme park.
It was also affected by a lower interest income of RM112.3mil due to the impairment of the group’s investment in promissory notes issued by the Mashpee Wampanoag Tribe.
The group was also hit by higher finance costs of RM53.2mil, mainly due to lower qualifying assets eligible for interest capitalisation during the period upon completion of certain projects under the GITP, but this was mitigated by the recognition of a gain of RM123.8mil from the disposal of a subsidiary in the United Kingdom.
Revenue for the first-half rose 10.7% to RM5.34bil and this was also contributed by the increase in revenue from the non-gaming segment aside from its exceptionally high hold percentage from mid to premium players segment.
The group has announced an interim single-tier dividend of six sen per ordinary share.
On its prospects, Genting Malaysia said that challenging days are ahead for the regional gaming industry, particularly in the premium players segment, in light of the uncertain economic sentiments. It added that the modest outlook for international travel demand is expected to persist. “The group remains cautious on the opportunities and growth potential of the leisure and hospitality industry. In Malaysia, the group is continuing work on the development of the outdoor theme park following the resolution of the legal dispute surrounding the park.
“Details on the opening date of the outdoor theme park will be made available in due course, ” Genting Malaysia said, adding that it would continue focusing its efforts on rationalising its operating cost structure and improving overall operational efficiencies at RWG.
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