Genting outlook faces mixed road ahead as Q2 profit falls sharply

KUALA LUMPUR: Genting Bhd reported a significant decline in its second-quarter net profit, but remains optimistic about the future of its diverse businesses. The company anticipates steady growth from its US, Singapore, and plantation ventures; however, they will be challenged by geopolitical concerns, reduced tourism, and increased expenses.

Genting's net profit tumbled to RM197.6 million in the second quarter, ending June 30, 2026, compared to RM680.8 million in the same period last year. Despite this, revenue rose by 14%, reaching RM7.75 billion. The first half of 2026 witnessed a similar drop in net profit, from RM958.4 million to RM414.8 million, while revenue grew by 8%, to RM14.41 billion.

Genting's Resorts World New York City (RWNYC) is expected to be a major growth catalyst upon fully commencing casino operations in April. The casino initially featured 242 table games and 2,500 slot machines, with a further 1,400 slot machines added later. Genting Malaysia Bhd recently commenced construction on July 2026, marking the beginning of the next phase to reinvent RWNYC as a full-scale integrated resort.

Both the US and Bahamas businesses demonstrated increased revenue and EBITDA in the second quarter, excluding Resorts World Las Vegas, thanks to RWNYC and the unification of Genting Empire Resorts. Resorts World Sentosa (RWS) made progress from its ongoing transformation program, although gaming revenue experienced a dip in the first half.

Genting Singapore adheres to its RWS 2.0 strategy, with planned upgrades to hotels, casinos, restaurants, and public areas through 2027 and 2028, aiming for completion by 2030, which coincides with Singapore's Greater Sentosa Master Plan. Resorts World Las Vegas showcased a stronger performance, driven by enhanced convention attendance and higher-end gaming.

Hotel occupancy surged to 88% in the second quarter, up from 80.2% the previous year, while the average daily rate climbed to US$274 from US$265. Genting anticipates sustained convention demand, fueled by the enlarged Las Vegas Convention Center and a focus on enhancing margins and curbing fixed costs. In Malaysia, Resorts World Genting witnessed higher EBITDA despite lower revenue, propelled by cost optimization.

However, Genting Malaysia anticipates continued tourism pressure due to surging airfares and travel-related fuel costs. To counter this, the company plans to focus on yield management, cost discipline, and new attractions to bolster visitation. The plantation division thrived on heightened fresh fruit bunch production, although lower crude palm oil prices tempered its gains.

Genting Plantations remains optimistic about palm oil prices, buoyed by biofuel mandates and improving energy prices, but warns that heightened output and diminished demand from major importers may curb further gains. Genting announced it would abstain from declaring an interim dividend for the current quarter, citing the need to strike a balance between investments, business demands, and debt reduction.

The group affirmed its commitment to judicious capital management while prioritizing sustainable long-term value creation.