KUALA LUMPUR: Genting Malaysia Bhd, whose share price has recently been hammered after an announcement of an 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).

The casino operator’s quarterly net profit grew 5.25% against RM395.7 million in the previous corresponding quarter. Earnings per share expanded to 7.37 sen for 2QFY19 compared with 6.99 sen a year ago. Quarterly revenue came in higher at RM2.66 billion against RM2.42 billion. It declares an interim dividend of six sen. 

Its cash balance declined to RM6.97 billion as at June 30 from RM7.99 billion a year ago.

The group’s home operation achieved 10% growth in revenue to RM1.75 billion while adjusted EBITDA remained flat at RM540 million. In the period, Resorts World Genting (RWG) reported overall decline in volume of business in the gaming segment, primarily due to lower incentives offered to customers in line with the group’s cost rationalisation initiatives.

For the first six months ended June 30 (1HFY19), the group’s revenue was also higher at RM5.33 billion against RM4.82 billion. Net profit, however, dropped to RM684.7 million in 1HFY19 from RM753.9 million. As a result, EPS shrank to 12.11 sen from 13.33 sen a year ago.

Commenting on its prospects ahead, 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.

GenM share price closed at RM3.12, up eight sen, giving it a market capitalisation of RM18.5 billion.