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Genting Malaysia’s leisure and hospitality biz up 23% in FY23

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Global casino operator Genting Malaysia has reported a continuous improvement in its performance due to further recovery from the COVID outbreak.

The firm’s leisure and hospitality operations reported higher revenue by 23 percent to RM6.4 billion ($1.35 billion) for FY23, while adjusted EBITDA grew by 26 percent to RM2.1 billion ($435 million).

According to a Thursday filing to Bursa Malaysia, Genting Malaysia notes that these improvements were largely driven by a higher volume of business from the gaming and non-gaming segments at Resorts World Genting (RWG), aided by the continued recovery in travel demand from the wider region.

Despite the company incurring higher operating expenses in the period, the Group’s adjusted EBITDA margin improved by 1 percentage point to 32 percent.

The company announced a final single-tier dividend of RM0.09 per ordinary share. Coupled with an interim dividend of RM0.06 per share, the firm declared a total dividend of RM0.15 per share for the full year 2023.

In the UK and Egypt, the company’s leisure and hospitality business reported an increase in revenue by 11 percent to RM1.67 billion ($352 million), largely attributable to a higher volume of business. However, adjusted EBITDA declined by 3 percent to RM291.2 million ($61.4 million), mainly due to ‘higher payroll and related costs’.

In the US and the Bahamas, revenue from the leisure and hospitality segments also grew by 13 percent to RM1.88 billion ($396 million), mainly contributed by overall higher volume of business at Resorts World of New York City (RWNYC) and the improved operating performance of RW Bimini. Adjusted EBITDA also increased by 15 percent to RM550.4 million ($116 million) despite higher operating and payroll-related expenses.

The company’s associate company, Empire Resorts, Inc. (Empire), recorded higher total gross gaming revenue, aided by the opening of Resorts World Hudson Valley in December 2022. However, Empire incurred higher payroll costs and operating expenses during the period, which impacted its adjusted EBITDA.

‘The Group’s overall adjusted EBITDA was aided by lower net unrealized foreign exchange translation losses of RM171.1 million ($36.1 million) on its USD-denominated borrowings during the year compared to net unrealized foreign exchange translation losses of RM244.8 million ($51.6 million) in FY22.’

Excluding the impact of the foreign exchange translation, the company registered a 19 percent increase in adjusted EBITDA.

Genting, roulette

4Q23

For the fourth quarter of 2023, Genting Malaysia’s revenue grew by 12 percent to RM2.7 billion ($574 million), while adjusted EBITDA improved by 78 percent to RM843.9 million ($178 million).

Additionally, the company reported a profit before taxation of RM294.2 million ($62 million), compared to a loss before tax (LBT) of RM372.4 million ($78.5 million) in the same period last year (4Q22). The Group also registered a net profit of RM217.6 million, compared to a net loss of RM469.0 million in 4Q22.

The leisure and hospitality business in Malaysia recorded higher revenue by 13 percent to RM1.8 billion ($379 million) and a 13 percent increase in adjusted EBITDA to RM529.5 million ($111.7 million).

These improvements were mainly attributable to the overall higher volume of business from Resorts World Genting (RWG)’s gaming and non-gaming segments. While the Group incurred higher operating expenses due to the ramp-up of its operations, the adjusted EBITDA margin remained at 29 percent from the same period last year.

Maybank cuts Genting Malaysia’s earnings forecast by 4% for FY24

Analyst Samuel Yin Shao Yang at Maybank has cut Malaysia’s earnings per share (EPS) forecast by 4 percent for FY24.

In an investment memo shared after Genting Malaysia’s results, Maybank notes that the lower EPS estimates are largely due to higher impairments of trade receivables and depreciation at Genting Singapore.

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