GENTING: Q4 Performance Misses Forecasts Amid Weaker Market Contributions, Neutral Rating Maintained

Public Investment Bank has maintained a “Neutral” rating for the group, following its latest financial results. The conglomerate reported a net loss of RM290 million for the fourth quarter of FY25, a significant increase from the RM169.4 million net loss recorded in the same period a year earlier.

Performance Review

Upon excluding non-operating items, the group’s cumulative FY25 results fell below expectations. This underperformance was primarily attributed to weaker profit contributions from its core markets in Malaysia and Singapore. Quarterly revenue remained relatively flat, as higher earnings from US and UK operations largely offset the downturns in Malaysia and Singapore.

Specifically, Malaysia experienced a 3% decline in revenue due to softer business volume, while Singapore’s gaming revenue decreased by 7%. The reported headline net loss of RM290 million in 4QFY25, after adjusting for factors like impairments, gains on disposal, and foreign exchange impacts, contrasts with a core net profit of RM15.1 million. This core profit represents a substantial decrease from RM263.8 million in 4QFY24, largely driven by the reduced contributions from the Malaysian and Singaporean segments.

Future Outlook and Challenges

The investment bank highlighted ongoing concerns regarding the group’s earnings visibility, projecting that a global economic slowdown will likely impact the hospitality and entertainment industry worldwide. In response, Public Investment Bank has revised down its FY26-27F earnings forecasts by an average of 24%, anticipating reduced business volumes for both Resorts World Genting and Resorts World Sentosa.

While the “Visit Malaysia Year 2026” is expected to boost the tourism sector, analysts foresee a challenging macroeconomic environment that could temper casino operations. Additionally, the report indicates an expected escalation in operating costs, particularly salary and administrative expenses, in the second half of 2026. The US operations are also not expected to achieve robust earnings growth this year, primarily due to a weakening US job market and overall consumer confidence.

A further concern is the group’s significant gearing level, which stems from the heavy capital commitments of its subsidiaries, Genting Malaysia and Genting Singapore, towards their development projects in New York and Resorts World Sentosa.

Recommendation

Based on these considerations, Public Investment Bank reiterates its “Neutral” recommendation for the group, with a revised target price set at RM2.90, adjusted downwards from the previous RM3.30.