Genting Malaysia’s revenues might be down, and investments might not have worked out the way they hoped, but profits improved regardless. That’s the news from their recent fourth quarter reporting to the Bursa Malaysia stock exchange.
The operator reported that Q4 profits rose 60.1% year over year in 2018, rising to MYR720.14 million (US$176.7 million). This was despite a 1.5% decline in revenue.
They accomplished this feat thanks to a change in taxes. In January 2019, the casino operator appealed to the Malaysian government for additional tax exemptions. That gambit paid off, and as a result the company saved MYR304.98 million per quarter (US$74.97 million).
Don’t take that for granted though. Japanese brokerage firm Nomura notes that the tax decision is not yet final. They wrote, “Note, however, that the final tax incentive decision of the courts will likely only come by third quarter 2019, so the outcome remains unclear.”
If they do benefit from the tax decision, it will save their bacon from a shaky American venture. The company had an impairment loss of MYR1.83 billion (US$450 million) by supporting the Mashpee Wampanoag Tribe. That group was unable to meet the conditions that would allow them to have land for an integrated resort.
Despite the positive outcome of the fourth quarter, Genting Malysia ended up at a loss for the year of 2018. They were MYR19.6 million (US$4.82 million) in the red, compared to a MYR1.16 billion (US$290 million) profit for 2017.
Genting Malaysia also commented on their theme park, currently being sued by Fox and Disney. They said:
“The development plans and options for the outdoor theme park are being reviewed amid ongoing legal proceedings. The group remains committed to the outdoor theme park at Resorts World Genting as a growth initiative in Malaysia.”
Looking at 2018 as a whole, Genting Malaysia could have been a disaster if not for their new tax situation. 2019 might be just as bad if Fox and Disney take their pound of flesh. They’ll be hoping to turn things around and avoid further money sinks, or things could get hairy fast.