KUALA LUMPUR (May 23): Genting Malaysia Bhd (GenM) reported a 25.11% lower net profit for its first quarter ended March 31, 2019 (1QFY19) at RM268.29 million or 4.75 sen per share compared with RM358.24 million or 6.33 sen per share in the corresponding quarter a year ago.
This was despite quarterly revenue growth of 14% to RM2.74 billion compared with RM2.4 billion in 1QFY18, supported mainly by higher contribution from its leisure and hospitality business in Malaysia, although overall gaming business volume declined due to the reduction in incentives offered to players as part of its cost rationalisation initiatives.
GenM said in its exchange filing today that the group incurred higher pre-opening expenses due to the provision for termination related costs of RM198.3 million at Resorts World Genting; as well as the lower interest income due to impairment of the group’s investment in the group’s investment in promissory notes issued by the Mashpee Wampanoag Tribe in 2018.
These were mitigated by a recognition of gain of RM123.8 million from the disposal of a UK subsidiary as well as higher adjusted earnings before interests, taxes, depreciation and amortisation.
GenM said the group will continue to review its capital expenditure requirements and rationalise its operating cost structure to mitigate the impact of the hike in casino duties against an increasingly challenging operating environment.
“Additionally, the group will focus on leveraging the new assets to grow key business segments. To this end, the group will place emphasis on intensifying database marketing efforts to optimise yield management, as well as improving service delivery and operational efficiencies at Resorts World Genting to enhance overall guest experience.
“In the UK, the group remains committed to streamlining its operations and improving overall operational efficiency to strengthen its position in the country,” said GenM, adding that operations at Resorts World New York City is expected to deliver steady growth despite a crowded market.
At market close today, GenM shares were six sen or 1.95% higher at RM3.13, valuing the group at RM18.59 billion.