Malaysia-based Genting BHD’s 2016 earnings soared by 125 percent, thanks to a one-off gain in the fourth quarter from the disposal of the group’s investment in Genting Hong Kong Ltd.
The Malaysian casino operator announced in its filing with Bursa Malaysia on Thursday that its full-year profit in 2016 leap-frogged to MYR2.88 billion (US$648.06 million) compared to its MYR1.26 billion ($283.53 million) profit in the previous year.
On the other hand, the group’s total revenue and adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) increased by 6% to MYR8.9 billion ($2.01 billion) and 5% to MYR2.43 billion ($547.43 million) respectively.
“In FY16, the leisure and hospitality business in Malaysia recorded growth in revenue and adjusted EBITDA despite the disruptions arising from ongoing development under the Genting Integrated Tourism Plan (“GITP”),” the company said in a statement.
Genting attributed the rise of its profit to a one-off gain of MYR1.27 billion ($285.78 million) on the share transaction in the fourth quarter of 2016.
It would be recalled that Genting unloaded its shares in Genting HongKong Ltd. – a related company that runs casino cruise ships in the Asia Pacific region – to raise money for improvement work on the firm’s Resorts World Genting property.
As a result, Genting’s fourth-quarter profit surged nearly 400 percent, despite generating slightly lower revenue in the period.
“Despite the challenging operating environment, the leisure and hospitality business in Malaysia achieved higher revenue and adjusted EBITDA during the quarter. This was mainly contributed by higher volume of business and lower operating costs from the mid to premium players segment,” it said.
Based on their record, Resorts World Genting (RWG) welcomed 20.2 million visitors in 2016, an encouraging 4% growth from last year. Day-trippers made up approximately 71% of the total visitor arrivals, with the remaining 29% being the hotel guests. Occupancy rate at RWG’s hotels stood at 93% in 2016.
The group also reported a higher revenue in the UK, which was boosted by better hold percentage from the premium players business, higher volume of business from the non-premium players business and higher contribution from Resorts World Birmingham.
Meanwhile, the Group remains cautious on the near term outlook of the leisure and hospitality industry, but continues to be positive on the long term.
“The global economy is expected to improve in 2017 but at an uneven pace across major economies. The challenges for global growth are mainly due to uncertainties surrounding the policy decisions and geopolitical development in certain advanced economies. In Malaysia, domestic demand is expected to continue to be the key driver of growth for the economy,” Genting pointed out. “Some of the gaming operators in Macau had recently reported improved performance. Nevertheless, the regional gaming market is expected to face continuing challenges in the Asian premium players business. In 2016, both Macau and Singapore reported growth in international tourist arrivals. Similarly, Malaysia had also seen higher tourist arrivals in 2016. The outlook for the regional and domestic tourism is expected to remain positive in 2017.”