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Genting returns to the black in Q1 with RM98mil net profit

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Rebound mainly due to higher leisure and hospitality division revenue post-pandemic.

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Genting Bhd’s leisure and hospitality segment posted higher profit before tax of RM1.6 billion in Q1 FY2023, a 68% increase from RM955 million a year earlier. (Bloomberg pic)

PETALING JAYA:
Genting Bhd returned to the black with a net profit of RM98.04 million in the first quarter ended March 31 (Q1 FY2023) compared with a net loss of RM199.68 million in the same quarter last year, mainly on higher leisure and hospitality division revenue following the relaxation of Covid-19 restrictions.

In a filing with Bursa Malaysia today, Genting said its revenue for the quarter rose 38.18% to RM5.82 billion from RM4.21 billion previously.

The leisure and hospitality segment recorded a better profit before tax (PBT) of RM1.6 billion in Q1 FY2023, a 68% increase from RM955 million a year before, as revenue expanded 43% to RM4.78 billion from RM3.33 billion during the same period.

The leisure and hospitality businesses in Malaysia, Singapore, the US and the Bahamas saw improvement in business activities, except for the UK and Egypt, which were affected by inflationary pressure, coupled with higher payroll and operating expenses.

However, Genting said a higher share of loss in joint ventures and associates was recorded in Q1 mainly due to a higher share of loss in Genting Empire Resorts LLC, the holding company of Empire Resorts Inc (Empire).

“The higher share of loss arose from higher payroll costs and operating expenses incurred during the period, which was also contributed by the opening of Resorts World Hudson Valley (in the US).

“The increase in effective ownership interest in Empire by Genting Malaysia Bhd (GENM) to 76.3% from 66.6% with effect from the immediate preceding quarter also resulted in a higher share of losses in Empire,” it said.

Meanwhile, Genting said its plantation division’s revenue increased in Q1 compared with the previous year’s corresponding quarter due to higher sales volume from the downstream manufacturing segment, partially offset by weaker palm product prices.

On the power division, it said revenue and adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) in the current quarter improved due to higher generation from the Banten power plant in Indonesia following a shorter outage period in the current quarter.

“The oil and gas division recorded lower revenue and Ebitda mainly due to weaker global crude oil prices in the current quarter,” it said.

Moving forward, Genting said the global economic environment is expected to gradually improve. However, the downside risks would continue to predominate amid ongoing geopolitical tensions and concerns surrounding the impact from monetary policy decisions.

While Malaysia’s economic expansion is expected to moderate in line with a slower global economy, growth will continue to be supported by domestic demand, it added.

“GENM continues to be cautiously optimistic on the near-term outlook of the leisure and hospitality industry and remains positive in the longer term,” it said.

Genting shares closed down six sen or 1.37% to RM4.33, giving the group a market capitalisation of RM16.79 billion.

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