Operator News
Malaysia – Genting Malaysia doubles its net profit in the first quarter
By Phil - 31 May 2017
Genting Malaysia has seen its net profits more than double the first quarter of 2017 with revenues of RM2,223.8m.
The Malaysian leisure and hospitality business recorded higher revenue in 1Q17 mainly contributed by a better hold percentage for the mid to premium segment of the business even though business volumes were lower.
Whilst the Genting Integrated Tourism Plan development works are still ongoing at Resorts World Genting, the resort nevertheless welcomed 4.9m visitors in 1Q17. Occupancy rate at RWG’s hotels was higher at 90 per cent amidst an increase in room inventory. The Group continues to introduce new attractions with the launch of the SkyPlaza this quarter. This latest offering boasts five levels of retail, F&B, leisure and entertainment options and is fitted with mesmerising floor-to-ceiling LED displays. This complements the new Awana SkyWay cable car system and SkyAvenue mall launched last year. More facilities and attractions under the GITP are expected to unfold from this year onwards.
Meanwhile, the indoor theme park and retail outlets in First World Plaza are currently closed for a complete makeover and scheduled to re-open next year with more exciting entertainment options.
In 1Q17, revenue for the Group’s US and Bahamas operations increased mainly due to higher revenue contribution from Resorts World Casino New York City as a result of an improved commission structure with the New York state authority. The US and Bahamas operations also recorded a higher adjusted EBITDA, mainly driven by higher revenue in New York and narrowing losses for the Bimini operations in Bahamas.
The Group’s UK operations achieved lower revenue and adjusted EBITDA for the quarter, mainly attributable to a lower hold percentage from its premium players business although higher business volumes were recorded for this segment.
The Group said: “Global economic conditions are expected to improve, supported by the expansion of economic activity in advanced and emerging markets and expansionary policy decisions in certain major economies. The Malaysian economy is expected to remain on a growth path underpinned by domestic demand. The outlook for international tourism is expected to remain positive across all regions. Meanwhile, the operating environment for the regional gaming market has shown signs of recovery, as evidenced by the recent reported improved performance of regional gaming operators in Singapore and Macau.
“The regional gaming market is expected to face continuous challenges in the Asian premium players business,” it added. “The Group remains cautious on the near term outlook of the leisure and hospitality industry, but remains optimistic on the growth potential of the industry in the longer term. In Malaysia, the Group continues to focus on the development of GITP as the remaining facilities and attractions will open progressively from this year onwards, complementing the new and existing attractions. The significant expansion and redevelopment under the GITP, once completed, is expected to elevate RWG’s position as the destination of choice in the region. Meanwhile, the Group remains committed on optimising overall operational efficiencies, yield management and database marketing efforts as well as enhancing service delivery at RWG.
“In the UK, the Group is pleased with the strong performance from the non-premium players business where it continues to grow its market share. The strategy to reduce short term volatility in its premium players business continues to prove successful in developing a more sustainable business. The Group has seen an encouraging improvement in performance at Resorts World Birmingham and has recently announced plans to introduce new attractions such as virtual reality games which will be new to the UK. In the US, Resorts World Casino New York City maintained steady business growth and continues to lead the Northeast US region in terms of gaming revenue amidst growing regional competition. The Group will continue to boost its direct marketing efforts to grow the visitation levels and frequency of play at the resort. In the Bahamas, the Group has embarked on cost rationalisation initiatives and will revise its marketing strategy to reposition the business.”
