GENTING BHD: A Paradox of Growth and Loss
The Malaysian palm‑oil giant GENTING BHD (GENTING) has just released its fourth‑quarter 2025 (Q4 25) results, and the numbers paint a picture of a company caught between incremental revenue gains and a dramatic erosion of profitability.
- Revenue rose modestly to RM 6.90 billion, a 1 % increase over the same quarter a year earlier (RM 6.88 billion).
- Net loss for Q4 25 expanded to RM 289.97 million, up from RM 169.38 million in Q4 24.
- The full year 2025 saw total net loss surge to RM 1.16 million, a stark reversal from the 2024 profit of RM 7.55 billion.
These figures come despite the company’s claim of a 10.43 % year‑on‑year rise in operating revenue to RM 30.13 billion, and an 8.91 % increase in total sales to RM 118.84 billion. The discrepancy underscores a troubling reality: GENTING is generating revenue, but it is not translating into profit.
The Cost of Impairment and Operational Drag
The widening loss is largely attributed to impairment charges and depreciation. In Q4 25, the company reported a net impairment loss of RM 289.97 million—a jump from RM 169.38 million in the prior year. The impairment reflects the devaluation of assets, likely linked to its overseas operations in Asia and Africa, where market volatility and regulatory changes have eroded asset values.
Additionally, interest income fell and administrative fines increased, further squeezing margins. The cumulative effect is a net loss that exceeds two‑thirds of the prior year’s loss, a growth of 71.2 %.
Dividend Policy: A Questionable Decision
Despite the losses, GENTING’s board declared a final single‑tier dividend of 5.0 sen per ordinary share. The ex‑date is set for 17 March 2026, with a dividend payment date following shortly after. This move signals confidence—or perhaps a strategic attempt—to maintain investor trust amid deteriorating fundamentals.
From a value‑creation perspective, the dividend is increasingly hard to justify. With a price‑to‑earnings ratio of 104.89, the stock’s valuation is already stretched. A dividend payout in the face of mounting losses suggests the company prioritises shareholder returns over reinvestment in a business under strain.
Stock Performance and Market Sentiment
GENTING’s share price has reacted sharply to the news. On 27 Feb 2026, the stock fell by 1.4 % to RM 2.82, continuing a three‑day downward trend. The broader Kuala Lumpur Composite Index mirrored this weakness, slipping below 1,730 points amid a sector‑wide pullback.
The price trajectory is consistent with the company’s 52‑week high of RM 3.76 and low of RM 2.76. At the market cap of MYR 11.4 billion, GENTING’s valuation is under scrutiny, particularly given its high P/E and the ongoing impairment charges.
Strategic Implications
- Operational Efficiency: The company must address the disconnect between revenue growth and profitability. Cost‑control initiatives, particularly in the palm‑oil extraction and processing chains, are essential.
- Asset Optimization: Impairment losses indicate under‑utilised or over‑valued assets. A thorough review of overseas holdings could free up capital.
- Dividend Sustainability: The board should reassess dividend policy, ensuring it aligns with long‑term solvency and growth prospects.
- Transparency and Governance: Recent administrative disputes and inheritance battles hint at governance challenges. Strengthening board oversight will be critical to restoring investor confidence.
Bottom Line
GENTING BHD’s latest results reveal a company in limbo: revenues inch up, but losses widen, driven by impairment and operational drag. The decision to continue dividend payouts in this climate risks eroding shareholder value. Investors should weigh the company’s historical strength in palm‑oil production against the stark erosion of profitability and the high valuation multiple. Only through decisive restructuring and disciplined financial management can GENTING hope to reverse its current trajectory and deliver sustainable value to shareholders.
