Genting net profit lower


"The regional leisure and hospitality industry will be adversely impacted, including the gaming industry. Consequently, the GenM group is more cautious on the near-term prospects of the leisure and hospitality industry, ” said Genting.

PETALING JAYA: Genting Bhd’s net profit for the fourth quarter ended Dec 31,2019 was down 19.28% to RM528.82mil on the back of a 1.75% drop in revenue to RM5.3bil.

The lower profit was due mainly to a lower adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda), partially mitigated by a net gain on disposal of investment properties in the United Kingdom by the Genting Malaysia Bhd (GenM) group of RM132.1mil.

The share of results in joint ventures (JVs) and associates for the current quarter included GenM’s share of loss in Empire Resorts Inc, following the completion of the proposed merger.

The loss was due mainly to GenM’s share of Empire’s financing costs, as well as depreciation and amortisation.

In August last year, GenM announced that it was buying a 46% stake in the loss-making Empire Resorts for RM539mil. Empire owns Catskills Casino in Upstate New York. It had further proposed a JV between GenM and Kien Huat Realty to gain full control of Empire Resorts.

The company has proposed a 15.5 sen dividend for the period, bringing full-year dividends to 22 sen.

On a full-year basis, net profit was up 46.15% to RM2bil on the back of a 3.66% increase in revenue to RM21.62bil.

Moving forward, Genting said that downside risks were more pronounced due to heightened global concerns over the impact of the Covid-19 disease on the global economy.

In Malaysia, the expansion of the domestic economy is expected to continue at a slower pace.

“Demand for international travel is expected to decline in the near term, following the imposition of travel restrictions and widespread concerns surrounding the Covid-19 outbreak. The regional leisure and hospitality industry will be adversely impacted, including the gaming industry. Consequently, the GenM group is more cautious on the near-term prospects of the leisure and hospitality industry, ” said Genting.

As for Genting’s listed subsidiary GenM, net profit for the fourth quarter to Dec 31,2019 was down significantly to RM299.74mil from RM720.14mil in the same quarter of the previous year. Revenue was down 2.59% to RM2.44bil.

The lower profits were due to a lower adjusted Ebitda, as well as its share of losses in Empire Resorts, as mentioned above.

GenM’s adjusted Ebitda in the fourth quarter of 2019 was at RM551.4mil compared with RM748.5mil in the fourth quarter of 2018, a decrease of 26%.

For the full year, the company turned around and recorded a net profit of RM1.4bil from a previous loss of RM19.59mil. Revenue increased 4.83% to RM10.41bil.

It has declared dividends of 14 sen for the period, bringing full-year dividends to 20 sen.

Looking ahead, GenM said that in Malaysia, the group remains focused on the timely completion of the outdoor theme park, as ongoing development works approach the final stages.

In the US, the group is focused on strengthening its position in the New York State gaming market.

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