Genting Malaysia profits in 2Q23, reversing previous losses

The Malaysian gaming and hospitality operator’s current performance was driven by Resorts World Genting; Nomura also cites return of visits as boost to Genting.

Original story by Ben Blaschke for Inside Asian Gaming

Genting Malaysia reported a profit of MYR30.3 million (US$6.5 million) for the three months to 30 June 2023, reversing an MYR42.3 million (US$9.1 million) loss in the prior year period and an MYR45.4 million (US$9.8 million) loss in Q1.

The improved results were driven by rising revenues at the company’s flagship Malaysian property, Resorts World Genting, where revenue grew by 17% year-on-year to MYR1.53 billion (US$329 million) – helping push group-wide revenues to MYR2.47 billion (US$532 million), up 14%. Both Genting’s UK and Egypt and its USA and Bahamas segments enjoyed smaller increases.

Group-wide Adjusted EBITDA of MYR447.9 million (US$96.4 million) was down 28% year-on-year and 25% quarter-on-quarter on a loss on investments, however RWG saw its Adjusted EBITDA increase by 16% to MYR532.3 million (US$115 million).

In a note following the company’s 2Q23 earnings call, Nomura analysts Tushar Mohata and Alpa Aggarwal said the improved performance in Malaysia was largely thanks to the return in numbers of foreign visitors, which helped push total visitation up from 4.9 million in Q1 to 5.4 million.

“Almost all hotel rooms are now operational in response to demand, even though visitors from China are yet to ramp up and in 2Q23 hotel guests from China were only 29% of pre-pandemic levels,” they wrote.
“The Average number of hotel rooms available in 2Q23 was ~10K, and occupancy was 98%.”

It was previously reported that a slowdown of the economy in China would impact tourist visits to Malaysia. Upcoming political changes in the country, which would contribute to the country’s gaming sector recovery, and the recovery of the ringgit would also be a boon for the hospitality giant.

Overall guest numbers grew by 80% year-on-year and 10% quarter-on-quarter, however foreign guest numbers were up by more than 100% year-on-year and by 32% sequentially, they added.

For the first six months of 2023 combined, Genting Malaysia saw revenues rise by 22% to MYR4.76 billion (US$1.02 billion), including a 32% increase at RWG to MYR2.96 billion (US$637 million). Adjusted EBITDA of MYR1.04 billion (US$224 million) was flat year-on-year while a net loss of MYR15.1 million (US$3.3 million) was narrowed from an MYR190.1 million (US$40.9 million) loss a year earlier.

Looking ahead, Genting Malaysia said, “The Group continues to be cautiously optimistic of the near-term outlook of the leisure and hospitality industry and remains positive in the longer-term.

Learn more about Genting’s next steps and focus as it continues to capitalize on increased visits to the country in the original article at https://www.asgam.com/index.php/2023/08/25/genting-malaysia-slips-into-profit-in-2q23-as-foreign-visitors-return-to-resorts-world-genting/