Genting reports profit down 79 percent in 16Q1

Casino operator Genting Bhd has reported its first quarter net profit fell 79 percent year-on-year, attributed to a new tax and lowered spending from VIPs.

Genting reported net profit at RM130.8 million (US$31.9 million) in 16Q1, whilst revenue rose 7.6 percent to RM4.7 billion .

According to a filing to Bursa Malaysia, Genting attributed the decrease to a goods and services tax which was introduced in Malaysia in April 2015, as well as lowered spending from high rollers at its casino.

At its Singapore operations, revenue mostly from the non-gaming sector at Universal Studios, which saw its best first-quarter performance since its opening in 2010.

In the UK, Genting said the better revenue was mainly due to its premium players business as a result of higher hold percentage offset by lower volume of business. It also attributed the improvement to a stronger pound exchange rate to the ringgit.

“The higher revenue and higher bad debt recovery in the current quarter contributed to a higher adjusted EBITDA.”

Meanwhile, Genting Bhd’s 49.3 percent-owned Genting Malaysia Bhd also announced lower earnings for the first quarter of 2016, down 59.8 percent to RM 161.6 million compared with RM 362.1 million in Q1, 2015.

The group’s adjusted EBITDA in the quarter was RM 444.3 million compared with RM 608.3 million in Q1 2015, a decrease of 27 percent.

Genting attributed the lower adjusted EBITDA due to foreign exchange losses of ringgit, and the lower adjusted EBITDA for its leisure and hospitality business in Malaysia.

“Whilst the operational performance of the group grew this quarter, the strengthening of the Malaysian ringgit against the U.S. dollar resulted in significant foreign exchange losses on the group’s U.S.-dollar denominated assets,” said Genting Malaysia in a filing.