This article first appeared in The Edge Financial Daily on August 30, 2019

KUALA LUMPUR: Genting Malaysia Bhd (GenM), whose share price has recently been hammered after announcing a RM538 million related party transaction to buy a 35% stake in a casino in New York, achieved higher net profit of RM416.48 million for the second quarter ended June 30, 2019 (2QFY19).

This was 5.25% higher than the RM395.7 million it recorded a year ago. Quarterly revenue grew to RM2.66 billion from RM2.42 billion, its stock exchange filing showed. It declared an interim dividend of six sen per share.

The casino operator’s cash balance declined to RM6.97 billion as at June 30 from RM7.99 billion a year ago.

Its home operation achieved 10% growth in revenue to RM1.75 billion, though adjusted earnings before interest, taxes, depreciation and amortisation remained flat at RM540 million.

In the period, Resorts World Genting (RWG) reported an overall decline in business volume in the gaming segment, primarily due to lower incentives offered to customers in line with the group’s cost rationalisation.

For the first six months ended June 30, the group’s revenue was also higher at RM5.33 billion from RM4.82 billion. Net profit, however, dropped to RM684.7 million from RM753.9 million.

On its prospects, the group said it remains cautious on the opportunities and growth potential of the leisure and hospitality industry.

“In line with uncertain economic sentiments, the regional gaming industry is anticipated to remain challenging, particularly in the premium players segment, as evidenced by the recent performances of certain gaming operators in Singapore and Macau.

“Meanwhile, the modest outlook for international travel demand is expected to persist,” said GenM in the statement yesterday.