Genting Berhad’s Q1 2025 Performance: Navigating Headwinds with Strategic Vision
As a senior blogger deeply immersed in the Malaysian market, I always pay close attention to the financial pulse of our conglomerates. Genting Berhad, a name synonymous with leisure, hospitality, and diversified investments, has just released its first-quarter results for the period ended 31 March 2025. While the headline figures might suggest a challenging quarter, a deeper dive reveals a company actively adapting and executing long-term strategies amidst a dynamic global landscape.
The report indicates a notable dip in overall revenue and profit compared to the same period last year, primarily impacted by its core Leisure & Hospitality division. However, it also highlights the resilience of other segments and ambitious plans for future growth, making it a compelling read for any retail investor looking beyond the immediate numbers.
Q1 2025 Financial Snapshot: A Mixed Bag
Genting Berhad’s consolidated results for Q1 2025 present a picture of reduced top-line and bottom-line performance when compared to the robust corresponding quarter of the previous year. This was largely influenced by factors such as a stronger Malaysian Ringgit and specific operational challenges within its leisure businesses.
Q1 2025
Revenue: RM6,508.0 million
Profit Before Taxation (PBT): RM626.2 million
Profit for the Period: RM277.6 million
Profit Attributable to Equity Holders: RM4.6 million
Basic Earnings Per Share (EPS): 0.12 sen
Adjusted EBITDA: RM1,990.6 million
Q1 2024
Revenue: RM7,431.3 million
Profit Before Taxation (PBT): RM1,380.4 million
Profit for the Period: RM998.6 million
Profit Attributable to Equity Holders: RM588.9 million
Basic Earnings Per Share (EPS): 15.29 sen
Adjusted EBITDA: RM2,574.0 million
The decrease in revenue by 12% and a significant 55% drop in Profit Before Taxation are primarily due to the Leisure & Hospitality division. The profit attributable to equity holders saw a drastic reduction, indicating a challenging period for core earnings. However, it’s crucial to understand the underlying drivers behind these numbers.
Diving Deeper: Segmental Performance
Leisure & Hospitality: Facing Headwinds
This powerhouse segment, encompassing operations in Malaysia, Singapore, UK, Egypt, US, and Bahamas, experienced an 18% decline in revenue and a 33% decline in Adjusted EBITDA compared to the same quarter last year. Several factors contributed to this:
- Resorts World Sentosa (RWS), Singapore: Saw lower revenue and Adjusted EBITDA, impacted by a lower VIP rolling win rate and temporary closure of Hard Rock Hotel for renovations. The previous year’s corresponding quarter benefited from stronger visitor numbers and tourism spending during the Chinese New Year, coupled with relaxed visa regulations between China and Singapore, creating a tougher comparative base for Q1 2025.
- Resorts World Genting (RWG), Malaysia: Lower revenue was attributed to the timing of the festive season and reduced business volumes in the premium players segment.
- UK and Egypt: Revenue was lower due to the strengthening of the Malaysian Ringgit against the British Pound. While local currency revenue was flat due to strong hold percentage offsetting lower business volumes, Adjusted EBITDA decreased due to higher operating and payroll expenses.
- US and Bahamas (RWNYC, RW Bimini, RWLV): Revenue decreased due to the strengthening of the Malaysian Ringgit against the US Dollar. Despite improved local currency performance for RWNYC and RW Bimini, overall Adjusted EBITDA was lower due to higher operating and payroll expenses. Resorts World Las Vegas (RWLV) was particularly affected by a lower hold percentage and lower visitation compared to the previous year’s Super Bowl event, which had boosted visitation.
Diversified Portfolio: Areas of Resilience and Growth
While Leisure & Hospitality faced challenges, other divisions demonstrated resilience and even growth, showcasing the Group’s diversified nature:
- Plantation Division: Revenue increased by 21% and Adjusted EBITDA surged by 67%. This strong performance was mainly driven by higher palm product prices and improved sales volume in the Downstream Manufacturing segment.
- Power Division: Recorded significant growth with revenue up 56% and Adjusted EBITDA up 78%. This was primarily due to higher generation from the Banten Plant in Indonesia, which experienced a shorter outage period compared to the previous year.
- Oil & Gas Division: Experienced lower revenue and Adjusted EBITDA, mainly due to a decline in global crude oil prices.
- Investments & Others: Showed an improved Adjusted LBITDA (lower loss), partly due to the recognition of net unrealised foreign exchange translation gains from GENM Group’s USD denominated borrowings, as opposed to net unrealised losses in the prior year.
Financial Health and Cash Flow
The Group’s financial position remains robust, though there’s a slight decrease in total assets and cash and cash equivalents compared to December 2024. Total assets stood at RM104,541.2 million as of 31 March 2025, a marginal decrease from RM105,093.0 million at the end of 2024. Cash and cash equivalents decreased from RM22,403.6 million to RM21,529.4 million.
Net cash from operating activities for Q1 2025 was RM948.7 million, lower than RM1,727.3 million in Q1 2024. This reflects the impact of lower operating profit and changes in working capital. The Group’s total borrowings saw a slight reduction to RM38,999.6 million from RM39,228.6 million at the end of 2024, with approximately 33% having a maturity profile of more than 5 years, indicating a well-managed debt structure.
Strategic Outlook and Future Prospects
Despite the current challenges, Genting Berhad remains strategically focused on enhancing its various business segments and seizing new opportunities. The Group acknowledges ongoing global uncertainties but maintains a cautiously optimistic view on the leisure and hospitality industry’s near-term prospects, with a positive long-term outlook.
Key Strategic Moves:
- Resorts World Genting (Malaysia): Continues to focus on improving appeal as a regional tourism hub with new facilities, ecotourism experiences, and special events for the Genting Group’s 60th anniversary. Emphasis is placed on yield management, operational efficiencies, and prudent cost management.
- UK Operations: Genting Malaysia Berhad (GENM) is expanding its presence, recently acquiring Aspers Stratford in London, strengthening its foothold in the city’s casino market. They are actively exploring further growth opportunities.
- US Operations: GENM aims to solidify its market leadership in New York State. The proposed acquisition of the remaining 51% interest in Genting Empire Resorts LLC (GERL) and its intercompany loan for USD41.0 million (approximately RM177.0 million) is a strategic move to fully realize operating synergies, cross-marketing, and resource sharing between Resorts World New York City (RWNYC) and Empire Resorts. RWLV is also recovering VIP play post-regulatory complaint finalization and upgrading hotel management systems.
- Resorts World Sentosa (Singapore): RWS is in a “bold transformation journey” with high-impact projects. This includes the launch of WEAVE (a vibrant retail and dining enclave), the grand opening of the Singapore Oceanarium in Q3 2025, and the debut of The Laurus (Singapore’s first Luxury Collection all-suite hotel) also in Q3 2025. Construction of the RWS 2.0 Waterfront Complex, featuring new luxury hotels and an entertainment podium, is also underway.
- Plantation Division: Anticipates overall growth in Fresh Fruit Bunches (FFB) production, particularly from higher-yielding areas in Indonesia, despite ongoing replanting activities in Malaysia. Palm oil prices are expected to stabilize.
- Property Segment: Launched U.Reka in Genting Indahpura and saw a successful soft launch of Jakarta Premium Outlets, the first in Indonesia.
- Oil & Gas Division: Progress continues on the Kasuri block project in Indonesia, with discussions on gas sale agreements and the ongoing construction of the onshore gas processing plant and the Floating Liquefied Natural Gas (FLNG) facility (54% complete). Project financing discussions are targeting finalization by end of 2025.
Summary and Outlook
Genting Berhad’s first-quarter 2025 results reflect a period of adjustment, primarily due to a challenging environment for its Leisure & Hospitality division and the strengthening of the Malaysian Ringgit. However, the report also underscores the Group’s strategic resilience and its commitment to long-term growth through significant investments and transformative projects across its diverse portfolio.
The focus on enhancing visitor experiences, expanding market presence through strategic acquisitions, and advancing major development projects like RWS 2.0 and the Kasuri FLNG facility, demonstrates a forward-looking approach. While the immediate quarter’s performance shows a decline, the underlying strategic initiatives are designed to position the Group for sustained competitiveness and profitability in the future.
Key points to consider for the future include:
- The successful execution and impact of the RWS 2.0 transformation projects, especially the new attractions and hotels slated for 2025.
- The full integration and synergy realization from the proposed acquisition of the remaining stake in Empire Resorts in the US.
- The stabilization of global crude oil and palm oil prices, which directly impact the Oil & Gas and Plantation divisions, respectively.
- The resolution of the ongoing litigation involving Genting Americas Inc., which could have a material impact.
- The continued effectiveness of cost management and operational efficiency initiatives across all segments.
Final Thoughts and Your Perspective
This report from Genting Berhad paints a picture of a company facing current headwinds but actively deploying capital and strategy to secure its future. The dip in Q1 2025 earnings, particularly for the core leisure business, is a point of concern, but it’s balanced by the progress in other segments and the ambitious development pipeline. The Group’s significant investments in enhancing its global leisure offerings, coupled with its robust diversified portfolio, suggest a strategic play for long-term value creation.
Do you think Genting Berhad’s strategic investments and diversification efforts will be enough to overcome the current market challenges and drive stronger growth in the coming quarters? Share your thoughts and insights in the comments below!
