In the first quarter of 2024, Genting Malaysia Berhad reported a substantial increase in revenues across its leisure and hospitality operations, showcasing impressive growth in all three segments – Malaysia, UK and Egypt, and the US and Bahamas. However, amidst the revenue surge, the company faced challenges such as foreign exchange losses and anticipated margin compression.
Revenue Performance:
Genting Malaysia Berhad witnessed a remarkable 22% increase in revenues to MYR2.71 billion (US$577 million) in the first quarter of 2024. The Malaysian flagship, Resorts World Genting, spearheaded this growth with a 25% year-on-year increase, although experiencing a marginal decline of 3% compared to the preceding quarter. Similarly, the UK and Egypt segment demonstrated a robust 26% year-on-year growth, while the US and Bahamas segment exhibited a commendable 13% year-on-year increase.
Adjusted EBITDA and Net Income:
The Group’s Adjusted EBITDA stood at MYR654.1 million (US$139 million), marking a 10% year-on-year rise. However, it experienced a 22% quarter-on-quarter decline primarily due to foreign exchange losses amounting to MYR130 million (US$28 million) on USD denominated borrowings. Excluding the impact of foreign exchange, the adjusted EBITDA showcased an impressive 24% year-on-year growth. Notably, the bottom-line net income surged to MYR243 million (US$52 million), reflecting a significant 31% quarter-on-quarter increase, attributed to unexpected EBITDA margin improvement in Malaysia and revenue growth in the US.
Challenges and Outlook:
Despite the promising revenue growth, Genting Malaysia Berhad faces imminent challenges in the form of anticipated EBITDA margin compression at Resorts World Genting. Factors contributing to this compression include cost normalization, the impact of a tax hike, and the recent closure of two out of three casino floors for upgrade works. Looking ahead, the company remains cautiously optimistic about the near-term prospects of the leisure and hospitality industry. It anticipates continued improvement in the regional gaming market, supported by optimistic outlook on international tourism and favorable domestic tourism-related measures such as visa-free entry for citizens of China and India. However, it acknowledges the need for vigilance amidst short-term uncertainties while maintaining a positive stance on the longer-term outlook.
Genting Malaysia Berhad’s first quarter of 2024 witnessed substantial revenue growth across its key segments, driven by strong performance in Malaysia, the UK and Egypt, and the US and Bahamas. Despite encountering challenges such as foreign exchange losses and anticipated margin compression, the company remains resilient and cautiously optimistic about the future. With a strategic focus on navigating short-term uncertainties and capitalizing on long-term opportunities, Genting Malaysia Berhad continues to position itself as a key player in the global leisure and hospitality industry.