GenM posts 3Q net profit of RM410.8m on absence of impairment losses

KUALA LUMPUR (Nov 29): Genting Malaysia Bhd (GenM) posted a net profit of RM410.84 million for the third quarter ended Sept 30, 2019 (3QFY19), following the group’s RM1.49 billion loss in the corresponding period last year.

In a bourse filing, the group said that 3QFY18 saw an impairment loss of RM1.83 billion on its investment in the promissory notes issued by the Mashpee Wampanoag Tribe.

In addition, it also noted a net reversal in pre-opening expenses amounting to RM91.2 million this quarter versus the RM14.6 million in pre-opening expenses in 3QFY18, which were mainly due to the reversal of RM101.4 million in termination related costs for the outdoor theme park at Resorts World Genting (RWG).

“The company has renegotiated the claims with certain contractors following the settlement agreement with Fox in July 2019 and determined that the provision of RM101.4 million is no longer required,” the group said in a statement accompanying the results.

However, the gambling and hospitality group noted that its earnings before interest tax depreciation (Ebitda) mitigated such advances in net profit, as lower income from its leisure and hospitality businesses internationally in destinations such as the US and UK were mitigating factors.

Meanwhile, quarterly revenue increased by 1.11% to RM2.63 billion from RM2.6 billion last year.

This higher quarterly revenue stemmed from its Malaysian leisure and hospitality business.

In addition, new attractions under the Genting Integrated Tourism Plan have been well received with non-gaming revenue increasing 36% y-o-y.

Genting Malaysia also noted that it saw higher revenue from its investments and others segment, which was mainly contributed by yacht charter revenue.

For the nine months ended Sept 30, 2019 (9MFY19), the group posted a net profit of RM1.1 billion from the RM739.73 million registered in the corresponding period last year. Nine-month revenue increased 7.34% to RM7.96 billion from RM7.42 billion last year.

The group said the outlook for regional gaming is expected to be challenging, particularly in the premium players business, due to ongoing macroeconomic uncertainties.

Meanwhile, international travel is expected remain modest, while domestic tourism will closely correlate with the economic performance and outlook of the country.

Genting Malaysia said the outdoor theme park in Genting Highlands is progressing well.

Shares in GenM closed 0.64% or two sen lower at RM3.11 yesterday, valuing the gaming giant at RM18.47 billion. The counter saw 3.13 million shares traded.

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