Genting Malaysia’s Q1 2025 Report: Navigating Headwinds with Strategic Plays
Genting Malaysia Berhad (GENM) has just released its first-quarter report for the period ended 31 March 2025, offering a detailed look into its financial health and operational performance. As a prominent player in the leisure and hospitality sector, GENM’s results are always keenly watched by investors, particularly those of us here in Malaysia. This report paints a mixed picture: while revenue saw a decline, the company managed to significantly boost its profit before tax, showcasing resilience amidst ongoing market challenges and strategic maneuvers.
Let’s dive into the numbers and understand what’s driving these results and what it means for the company’s future trajectory.
Core Data Highlights: A Closer Look at the Numbers
Overall Financial Performance
For the first quarter of 2025, Genting Malaysia reported a revenue of RM2,595.2 million, a 6% decrease compared to the same period last year. However, the highlight of the quarter was the impressive surge in profit before taxation, which jumped by 59% to RM184.0 million. This significant improvement is primarily attributed to a higher adjusted EBITDA and reduced share of losses from associates, despite an increase in finance costs.
Q1 2025
Revenue: RM2,595.2 million
Adjusted EBITDA: RM737.2 million
Profit Before Taxation: RM184.0 million
Profit Attributable to Equity Holders: RM72.577 million
Basic Earnings Per Share: 1.28 sen
Q1 2024
Revenue: RM2,764.9 million
Adjusted EBITDA: RM654.1 million
Profit Before Taxation: RM115.9 million
Profit Attributable to Equity Holders: RM57.783 million
Basic Earnings Per Share: 1.02 sen
The revenue dip was mainly due to several factors:
- Malaysia’s Leisure & Hospitality: A 7% decrease, influenced by the timing of festive seasons and lower business volumes in the premium players segment.
- United Kingdom and Egypt: A 7% reduction, primarily due to the strengthening of the Malaysian Ringgit (RM) against the British Pound (GBP). In local currency terms, revenue was flat, as strong hold percentage offset lower business volumes impacted by festive timing.
- United States of America and Bahamas: A 3% decrease, also a result of a stronger RM against the US Dollar (USD). However, in local currency, revenue increased due to improved operating performance at Resorts World Omni and Resorts World Bimini.
The adjusted EBITDA, on the other hand, saw a 13% increase to RM737.2 million. It’s important to note that this was significantly boosted by net unrealised foreign exchange translation gains of RM50.4 million from USD denominated borrowings in the current quarter, a stark contrast to net unrealised foreign exchange translation losses of RM130.0 million in the same period last year. Excluding this foreign exchange impact, the underlying adjusted EBITDA would have been RM686.8 million, a 12% decrease compared to RM784.1 million in Q1 2024, reflecting higher operating and payroll-related expenses across its UK/Egypt and US/Bahamas operations, and lower business volume in Malaysia.
Segmental Performance
A closer look at the segments reveals the varied performance across GENM’s global footprint:
Leisure & Hospitality – Malaysia
Revenue declined by 7% to RM1,622.1 million. Adjusted EBITDA also fell by 11% to RM518.2 million, largely due to lower business volumes. The adjusted EBITDA margin for the quarter was 32%, slightly down from 33% in Q1 2024.
Leisure & Hospitality – United Kingdom and Egypt
Revenue decreased by 7% to RM413.4 million, impacted by the stronger RM. Adjusted EBITDA saw a sharper decline of 25% to RM55.5 million, primarily due to higher operating and payroll expenses.
Leisure & Hospitality – United States of America and Bahamas
Revenue was down 3% to RM501.3 million due to currency translation. Adjusted EBITDA decreased by 22% to RM119.0 million, also affected by higher operating and payroll-related expenses.
Financial Health and Cash Flow
As of 31 March 2025, Genting Malaysia’s financial position remains solid. Total assets stood at RM28,512.4 million, a slight decrease from RM28,567.4 million at the end of 2024. Total equity also saw a minor dip to RM10,826.7 million from RM11,039.0 million. Net assets per share were RM2.07.
Cash and cash equivalents were RM3,431.0 million, down from RM3,536.6 million at the start of the year. Net cash flow from operating activities for the quarter was RM424.1 million, a healthy positive, though lower than the RM517.0 million generated in the same period last year. The group’s total borrowings were RM12,191.7 million, a marginal decrease from RM12,220.8 million as of 31 December 2024, indicating stable debt management.
| Financial Indicator | As at 31 March 2025 (RM’000) | As at 31 December 2024 (RM’000) |
|---|---|---|
| Total Assets | 28,512,410 | 28,567,400 |
| Total Equity | 10,826,688 | 11,039,025 |
| Cash and Cash Equivalents | 3,431,027 | 3,536,631 |
| Total Borrowings | 12,191,700 | 12,220,800 |
Risks and Prospects: Charting the Future Course
Genting Malaysia acknowledges the ongoing global economic uncertainties and heightened geopolitical tensions that could impact both domestic and international sentiments. While demand for international tourism is expected to remain resilient, recovery is anticipated to be uneven, posing increasing challenges for the regional gaming market.
Despite these headwinds, the Group remains cautiously optimistic about the near-term prospects and positive about the longer-term outlook for the leisure and hospitality industry. Their strategy focuses on enhancing offerings, expanding presence, and optimizing operations across key markets:
- Malaysia: The company is dedicated to boosting Resorts World Genting’s (RWG) appeal as a regional tourism hub. This includes introducing new facilities and ecotourism experiences. The ongoing 60th-anniversary celebrations of the Genting Group are also set to feature special events and promotions to enrich visitor experiences. The focus remains on improving yield management, operational efficiencies, service delivery, and prudent cost management.
- United Kingdom: GENM aims to expand its footprint and enhance competitiveness. The recent acquisition of Aspers Stratford in London is a testament to this, strengthening its position in the city’s casino market. The Group continues to explore further growth opportunities, including product enhancements and new offerings, while maintaining disciplined cost management.
- United States: The Group is focused on solidifying its leadership in the competitive New York State gaming sector. A significant development is the proposed acquisition of the remaining 51% membership interest in Genting Empire Resorts LLC (GERL) for approximately USD41.0 million (RM177.0 million). This move, subject to regulatory approval, aims to fully realize operating synergies between Resorts World New York City (RWNYC) and Empire Resorts, Inc., enhancing competitiveness in the northeastern US gaming market through cross-marketing and resource sharing. The company is also closely monitoring developments related to the New York Gaming Facility Board’s Request for Applications.
- Bahamas: Efforts are underway to drive visitation to Resorts World Bimini by expanding its cruise strategy, increasing port calls, and intensifying marketing. An anticipated increase in airlift from Miami to Bimini by late 2025 is also expected to boost visitor numbers. Operational optimization and cost control remain key priorities.
Material Litigation to Watch
A notable risk highlighted in the report is the material litigation involving Genting Americas Inc. (GAI), an indirect wholly-owned subsidiary. RAV Bahamas Ltd (RAV) has filed a complaint seeking damages in excess of USD600 million related to the operations of Resorts World Bimini. GAI firmly believes the complaint is baseless and is actively defending against the claims. While a mediation session in May 2025 did not result in a resolution, the case continues with fact discovery proceedings.
Summary and
Genting Malaysia’s first quarter of 2025 demonstrates a company actively navigating a challenging global landscape. While revenue experienced a slight contraction, the significant uplift in profit before taxation, driven by foreign exchange gains and strategic operational adjustments, highlights the company’s ability to enhance profitability. The group’s disciplined approach to cost management and its strategic investments in key markets, particularly the proposed acquisition in the US and expansion in the UK, signal a clear intent to drive future growth and solidify its market positions. The ongoing legal challenge in the Bahamas, however, will be a point for stakeholders to monitor closely.
Key points from the report:
- Revenue declined due to specific market conditions and currency translation, but underlying operational performance showed resilience in some segments.
- Profit before taxation saw a substantial increase, partly aided by favorable foreign exchange movements on borrowings.
- Strategic initiatives are in place to enhance visitor experience in Malaysia and expand market share in the UK and US, with a focus on realizing synergies.
- The company maintains a healthy financial position, though cash flow from operations saw a decrease compared to the previous year.
- A material litigation case in the US related to Resorts World Bimini operations is ongoing and requires attention.
Given these strategic moves and market dynamics, do you believe Genting Malaysia can sustain its growth momentum and overcome the ongoing challenges? Share your thoughts in the comments section below! Your insights are valuable.
