Net profit of casino operator Genting Malaysia Bhd soared by as much as 108 percent in the second quarter, buoyed by a strong UK casino business that kept the company afloat during a “challenging operating environment.
In Thursday’s disclosure to Bursa Malaysia, Genting reported that its net profit more than doubled to RM476.44 million (US$118.43 million) during the April to June 2016 period compared to the same period last year mainly due to a turnaround in its UK casino business.
On the other hand, Genting’s total revenue for the first six months of 2016 grew by nine percent year-on-year to RM4.45 billion (US$ 1.11 billion). Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the period increased by 6 percent, to RM1.11 billion (US$275.92 million). Net profit was up 5 percent year-on-year at RM609.4 million (US$151.48 million).
Data showed that Genting’s UK casino saw its revenue jump by 70.7 percent to RM504.2 million (US$125.33 million) revenue year-on-year. The adjusted EBITDA of Genting’s casino business in UK was at RM92.8 million (US$23.07 million).
The firm attributed UK casino’s stellar performance to the premium players business, which it said was a result of “revised marketing strategies adopted.”
Aside from the UK casino business, Genting’s Malaysian and US operations in leisure and hospitality also improved their adjusted EBITDA as it chalked higher revenues during the second quarter of 2016 compared to the same period last year.
Second quarter financial results of Genting’s Malaysia casino grew by 4 percent to RM1.35 billion (US$335.58 million).
“This was mainly contributed by an improved hold percentage, which is in line with expectation, for the mid to premium segment of the business even though business volumes were lower,” Genting said.
Despite the firm’s stellar performance, Genting said that they remain cautious on the near term outlook of leisure and hospital industry.
“The global economy is expected to remain challenging given the uncertainty over the pace of recovery in major economies as well as the impact of United Kingdom’s exit from the European Union. In Malaysia, domestic demand is expected to continue to be the main growth driver for the economy,” it said.