KUALA LUMPUR: Shares of Genting Bhd
and Genting Malaysia Bhd fell in early trade Friday after reporting a net loss in their latest financial results.
Genting Bhd dropped 8.85% or 33 sen to RM3.40 with 20.98 million shares traded, while Genting Malaysia fell 10.59% or 25 sen to RM2.11 with 34.26 million shares changing hands as of 10.05 am.
Genting Bhd posted a net loss of RM169.4mil, or loss per share of 4.40 sen in the fourth quarter Dec 31, 2024 (4Q24) against a net profit of RM150.1mil, or 3.9 sen a year earlier.
Revenue for the quarter fell 5.3% to RM6.88bil from RM7.27bil.
For the full financial year, Genting posted a net profit of RM882.95mil, down 4.96% from RM929.2mil in FY23, despite revenue rising 2.21% to RM27.72bil from RM27.12bil.
Meanwhile, Genting Malaysia posted a net loss of RM457.9mil, bringing its full-year net profit to RM251.3mil.
Revenue in 4Q24 stood at RM2.7bil, lifting full-year revenue to RM10.9bil.
Hong Leong Investment Bank Research (HLIB Research) said Genting Malaysia’s results came in below the house (54%) and consensus (43%) full-year estimates.
“Key negative deviation to our forecast was mainly due to higher-than-expected operating and payroll related expenses in UK and US, as well as higher sharing of losses from Empire Resorts.
“Notably, the core profit after tax and minority interests (PATMI) for the financial year 2024 (FY24) was derived after adjusting for exceptional items (EIs) amounting to RM52.8mil, primarily from property, plant, and equipment (PPE) write-offs,” it said.
HLIB Research said Genting Malaysia, which owns and operates the country’s only integrated resort, Resorts World Genting (RWG), is set to benefit from Malaysia’s positive tourism outlook.
However, ongoing operational challenges and uncertainties in its UK and US segments, as well as Empire Resorts, could pose downside risks to the recovery of its Malaysian operations.
“Given results shortfalls, we reduce FY25f-26f by -34.5%/-26.8% to mainly reflect higher operating costs in UK and US business segments, as well as higher loss sharing from Empire Resorts,” the research house said.
It has downgraded Genting Malaysia to “sell” (from buy), with a lower SOP-derived target price of RM1.99 (from RM2.28 previously).
Meanwhile, TA Securities said Genting Bhd’s FY24 core profit of RM995.1mil missed expectations at 66% of the house’s full-year forecast and 61% of consensus estimates.
The variance was due to higher-than-expected losses from Empire Resorts and lower-than-expected contributions from Genting Singapore (GENS) and Resorts World Las Vegas (RWLV).
“We cut Genting Bhd’s FY25-26 earnings lower by 16-19% after revising GENS and RWLV’s earnings lower, as well as incorporating Genting Malaysia’s revised earnings projections,” TA said.
“We reduce Genting’s SOP valuation to RM4.02/share (from RM4.42) after the earnings downgrade. However, we maintain our ‘buy’ recommendation on the stock as we believe the sell down is overdone,” it added.
