Genting Malaysia reported a 33% year-on-year increase in group-wide revenues and 43% increase in Adjusted EBITDA in the three months to 31 March 2023, driven by strong recovery at its Malaysian flagship, Resorts World Genting (RWG). However, the results were softer than the December 2022 quarter on a slower than expected return of international players and challenging local weather events.
Revenue of MYR2.28 billion (US$493 million) included MYR1.40 billion (US$303 million) from RWG, the latter representing a 42% year-on-year increase although 12% lower than the December 2022 quarter. Genting Malaysia’s properties in the US and Bahamas recorded a 29% year-on-year increase to MYR460.7 million (US$100 million) while the UK and Egypt fell by 11% to MYR352.5 million (US$76 million).
Adjusted EBITDA of MYR592.9 million (US$128 million) was up 43% year-and-year and 25% quarter-on-quarter, while net loss of MYR45.4 million (US$9.8 million) was narrowed from a loss of MYR147.9 million (US$32 million) in 1Q22 and from MYR469 million (US$101 million) in 4Q22.
Nomura analysts Tushar Mohata and Alpa Aggarwal said in a note following Genting Malaysia’s earnings call that business performance and visitor numbers were softer than expected due to foreign arrivals still not returning to pre-pandemic levels and some Malaysian players also travelling to Macau, while there was also lower domestic visitation due to more rainfall in January and February and the continued road closure due to a December landslide.
“Management still faces shortage of permanent laborers and needs to hire temporary staff for peak timings to open up more tables,” they wrote. “Capacity at RWG has still not reached 2019 levels but it has also increased electronic gaming machines (ETGs) as a proportion of total tables.”
Genting Malaysia said it expects growth will “continue to be supported by domestic demand.
“International travel demand is expected to remain positive, although its recovery could be constrained by the macroeconomic uncertainties and inflationary pressures,” the company explained. “The regional gaming market is expected to continue improving in tandem with the improved outlook on global travel. The Group continues to be cautiously optimistic on the near-term outlook of the leisure and hospitality industry and remains positive in the longer-term.”
