Genting Malaysia swings to loss in 2018 on impairments

Genting Malaysia swung to a net loss of RM19.6 million (US$4.8 million) in the 2018 financial year, attributed mainly to an impairment loss of RM1.83 billion on promissory notes issued by the Mashpee Wampanoag Tribe.

That being said, revenue rose 6 percent in the year, reaching RM9.9 billion, while adjusted EBITDA rose 30 percent to RM2.9 billion.

The company’s Malaysian gaming operations performed well, with revenue and adjusted EBITDA rising 13 and 27 percent respectively.

Genting Malaysia said this was due to a higher hold percentage in the mid to premium segment of the business, and business volume growth from the mass market segment after a rollout of new facilities and attractions under the GITP.

In the UK and Egypt, the group recorded a decrease in revenue and adjusted EBITDA in the year, largely due to lower volume of business from the premium gaming segment.

This was, however, mitigated by higher contributions from Crockfords Cairo and the Group’s interactive business.

There were also declines in the group’s operations in the US and Bahamas, with revenue down 4 percent year-on-year. Genting said this was due to unfavorable foreign exchange translation of USD against RM.

Excluding this impact, revenue increased by 3 percent, primarily attributable to higher contribution from the Hilton Miami Downtown hotel, it said.

Looking to the future, Genting Malaysia said it expects international tourism to remain positive through 2019, but noted that “weakening economic sentiments may pose some downside risks.”

“Consequently, the regional gaming market may also face increasing challenges, particularly in the premium players segment,” it added.

The company said it expects challenges ahead for its Malaysia business due to the casino duty increase which was announced in Malaysian Budget 2019, and said it will continue to review and manage its cost structure.

Regarding its dispute with Disney / Fox over the outdoor theme park, Genting said that “development plans and options for the outdoor theme park are being reviewed amid ongoing legal proceedings.”

“The Group remains committed to the outdoor theme park at RWG as a growth initiative in Malaysia,” it said.