Genting’s 2Q profit up by more than four times

KUALA LUMPUR (Aug 26): Genting Bhd’s second quarter net profit jumped by more than four times to RM294.74 million from RM67.91 million a year earlier, mainly due to lower net fair value loss on derivative financial instruments and lower impairment losses.

Revenue for the quarter ended June 30, 2016 (2QFY16) was 1.38% higher at RM4.23 billion against RM4.17 billion in 2QFY15, the group said in a filing with Bursa Malaysia.

Net profit for the first-half of financial year 2016 (1HFY16), however, fell 38.14% to RM425.57 million from RM687.97 million in 1HFY15, mainly due to lower adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) and lower gain on disposal of available-for-sale financial assets. This was despite revenue rising 4.61% to RM8.93 billion from RM8.54 billion.

Genting said that although Resorts World Sentosa recorded higher revenue in 1HFY16, its gaming business generated lower revenue. Revenue from Resorts World Genting, meanwhile, was marginally lower mainly due to the impact of the goods and services tax, and a lower-than-expected hold percentage in the mid to premium segment of the business although its business volumes were higher.

Genting’s leisure and hospitality business in the UK recorded higher revenue mainly due to the implementation of revised marketing strategies for international markets. As for the leisure and hospitality business in the US and Bahamas, higher revenue was recorded mainly due to higher volume of business from the Resorts World Casino New York City operations and Resorts World Bimini, partially offset by the cessation of the Bimini SuperFast cruise ferry operations. The increased revenue was also due to a stronger US dollar against the ringgit.

On its plantation segment, Genting said the Malaysian operation recorded lower revenue in 1HFY16 despite stronger palm product selling prices due to lower fresh fruit bunch (FFB) production, while revenue from Indonesia increased due to increased FFB production and stronger palm product prices.

Separately, Genting’s listed unit Genting Malaysia Bhd reported that its net profit more than doubled to RM476.44 million in 2QFY16 from RM230.92 million in 2QFY15, mainly due to higher Ebitda and higher interest income. Revenue grew 12.68% to RM2.23 billion from RM1.98 billion. Genting Malaysia declared an interim single-tier dividend of three sen per share, going ex on Sept 28 and payable on Oct 24. For 1HFY16, Genting Malaysia’s net profit rose 7.59% to RM638.01 million from RM593.02 million in 1HFY15, while revenue increased 9.14% to RM4.45 billion from RM4.08 billion.

Meanwhile, Genting’s plantation listed subsidiary Genting Plantations Bhd said its net profit for 2QFY16 rose 2% to RM40.83 million from RM40.03 million in 2QFY15. Revenue grew 1.11% to RM309.12 million from RM305.73 million. This followed a higher contribution from the plantation segment, underpinned by stronger palm product selling prices which outweighed lower FFB production, mostly offsetting a decline in downstream manufacturing segment revenue owing to lower offtake of biodiesel.

Genting Plantations has declared an interim single-tier dividend of two sen per share, going ex on Sept 28 and payable on Oct 20.

Net profit in 1HFY16 declined 26.83% to RM67.82 million from RM92.68 million in 1HFY15.

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This article first appeared in The Edge Financial Daily, on Aug 26, 2016. Subscribe to The Edge Financial Daily here.