10 things I learned from the 2023 Genting Malaysia AGM

Established in 1980 and listed on Bursa Malaysia in 1989, Genting Malaysia Berhad owns and operates resort properties across Asia, Europe, and the Americas. Notable ones include Resorts World Genting in Malaysia; Resorts World New York City, Resorts World Catskills, and Resorts World Hudson Valley in the U.S.; and Resorts World Bimini in the Bahamas.

Here are 10 things I learned from the 2023 Genting Malaysia AGM.

1. Revenue more than doubled to RM8.6 billion year-on-year in 2022 while net loss attributable to owners of the company narrowed from RM946.8 million in 2021 to RM520.0 million in 2022. Dividend per share improved from 9 sens in 2021 to 15 sens in 2022.

Source: Genting Malaysia

The better results were due to the recoveries of economies and reopening of borders where the company operates. However, it is worth noting that the financial performance remains below pre-pandemic levels. The company has experienced three consecutive years of losses since 2020, primarily because it operates in a cyclical industry.

2. Malaysian operations contributed to the lion’s share of the company’s overall revenue. More than twenty-two million visitors visited Resorts World Genting in 2022 compared to 7.1 million and 28.7 million in 2021 and 2019 respectively. The number of Southeast Asians tourists was almost on par with pre-pandemic levels, but not mainland Chinese tourists as border restrictions were only relaxed much later there.

Source: Genting Malaysia

3. In February 2022, Malaysia’s Genting SkyWorlds Theme Park was unveiled to the public. With a substantial investment of over US$800 million, the company dedicated significant resources solely to this impressive theme park. Designed as an additional entertainment attraction, its purpose is to entice both locals and tourists, encouraging them to visit, spend time, and partake in various activities, including gambling. About three quarters of Genting Malaysia’s revenue in 2022 was derived from its gaming operations. Resorts World Genting was packed with foreign and local tourists during my recent visit there.

4. Genting Xintiandi is a 60-acre integrated development jointly developed by Aset Kayamas and Genting Malaysia. The development is located at the mid-hill of Resorts World Genting and consists of serviced apartments, commercial spaces, and hotels. The development is expected to create at least RM20 billion in gross development value and be completed in phases by 2038. The development competes with other developers who establish developments at the mid-hill and benefit from visitors who visit the hilltop resort and make their stopovers there.

5. Revenue from the UK and Egypt surged 41.3% year-on-year to RM1.5 billion in 2022 as land-based casinos recovered and Crockfords casino in London was reopened. The company acquired three casinos from Casino 36 UK Limited. Impairment was made to certain licences and vacant leased properties (fully impaired) in the UK. Unfortunately, the business performance in this region declined in Q1 2023 when compared to both the previous corresponding quarter and the preceding quarter. The decline was attributed to lower business volume and higher operating costs, including one-off payroll expenses. Despite the challenges faced, the management remains optimistic about the future. They believe that the business, which has historically provided decent returns over the years, will recover from the current setbacks.

6. Revenue from operations in the U.S. and the Bahamas improved 25.3% year-on-year to RM1.7 billion in 2022 due to higher business volume registered at Resorts World New York City, as well as improved performance by Hilton Miami Downtown hotel. Its business performance in terms of revenue and adjusted EBITDA surpassed pre-pandemic levels. In 2022, the company was the leading gaming operator in the New York State with a market share of about 41%.

7. Genting Malaysia’s proposed disposal of the 15-acre Miami Herald Land at US$1.2 billion or equivalent to RM5.7 billion was cancelled. The land was initially purchased at US$259 million. The company is open to new bids and aims to use the cash proceeds to fund future investments and operations. Further, the company’s attempt to bid for a 10-year concession to operate casino games in Macau was unsuccessful while incumbent players there secured their renewals.

8. The company invested US$624 million and owns a 49% stake in Empire Resorts, Inc. that owns and operates Resorts World Catskills and Resorts World Hudson Valley. Resorts World Catskills is one of the four commercial gaming-licensed casinos in the New York State. Empire also holds one of nine mobile sports betting licenses in the New York state. The recently launched Resorts World Bet in December 2022 is still loss-making and makes up a small part of the entire company.

Resorts World Hudson Valley opened in the New York State in December 2022 and offers only video gaming facilities without table games. Genting Malaysia has set its sights on expanding its foothold in the northeast U.S. region. The company is actively pursuing a bid to establish a commercial casino, complete with table games, in Downstate New York. The target is to finalize this venture by the end of 2023, with a minimum capital requirement of US$1 billion.

9. Impairment loss totalling RM352.6 million were made to property, plant, and equipment as well as casino licences of Resorts World Bimini in the Bahamas. The impairment was due to slower-than-expected recovery caused by COVID-19 restrictions in 1H 2022 and rising interest rates. The company will focus on its cruise strategy to draw visitations to this resort in collaboration with international cruise operators.

10. Other receivables amounted to RM198.4 million in 2022. Chief financial officer Koh Poy Yong explained that the receivables were related to cash advances (through subscription of promissory notes) for the Mashpee Wampanoag Tribe’s pre-development expenses to develop an integrated gaming resort in Taunton, Massachusetts. These advances are expected to be recovered once the construction starts.

The fifth perspective

Genting Malaysia continues to leverage on its strong local customer base to grow its domestic operations. The company is poised to reap the rewards of heightened air travel demand and an influx of inbound tourists. Compared to the challenging COVID-19 period, the global economic outlook has improved significantly.

However, certain economic headwinds persist, such as ongoing airline capacity limitations, geopolitical tensions, the possibility of a global economic slowdown, tighter monetary policies, inflationary pressures, weakening consumer sentiment, and increased competition. Nonetheless, the company is showing strong signs of progress on its road to recovery, and its efforts to leverage its strengths and navigate the prevailing challenges position it for future success.

Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »

Shak Chee Hoi

Chee Hoi is an investor and research analyst at The Fifth Person. He was previously involved in wildlife conservation work with a non-governmental organisation as well as sustainability consultancy work. He personally believes in impacting society and the environment for the greater good.

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