Genting Bhd’s Q1 Earnings: A Tale of Two Divisions

In a surprising turn of events, Genting Bhd, a Malaysian conglomerate known for its palm oil production and diverse operations, reported a significant plunge in its first-quarter earnings for 2025. The company’s net profit fell dramatically to RM4.57 million, a stark contrast to the RM588.87 million recorded in the same period the previous year. This decline is primarily attributed to the underperformance of its leisure and hospitality division, which has been a cornerstone of Genting’s business model.

Revenue Decline and Market Challenges

Genting’s group revenue for the quarter stood at RM6.51 billion, marking a 12% decrease from RM7.43 billion in the previous year’s corresponding quarter. The leisure and hospitality division’s struggles were compounded by unfavorable currency exchange rates, with the Malaysian ringgit strengthening against the US dollar, British pound, and other major currencies. This currency fluctuation adversely affected the company’s revenue and earnings before interest, tax, depreciation, and amortization (EBITDA).

Operational Setbacks

The company’s financial statement highlighted several operational challenges. The leisure and hospitality sector, which includes iconic properties like Resorts World Sentosa and Genting Highlands, experienced a downturn in performance. This was further exacerbated by increased impairment losses, contributing to the overall decline in net profit.

A Silver Lining: Genting Malaysia’s Performance

In contrast to the parent company’s struggles, Genting Malaysia, a subsidiary, reported a more positive outlook. The company’s net profit increased by 25.6% to RM72.58 million, driven by a favorable foreign exchange gain of RM50.4 million from its US dollar-denominated borrowings. This gain offset a previous year’s foreign exchange loss of RM130 million, showcasing the impact of currency movements on financial performance.

Economic Outlook and Future Challenges

Genting’s outlook remains cautious, with the company acknowledging the ongoing uncertainties in global trade and market conditions. The Malaysian economy is expected to experience slower growth, and the recovery in international tourism is anticipated to be uneven across regions. This poses additional challenges for Genting’s regional gaming market, which may face increased competition.

Industry Context

Despite these challenges, Genting remains a significant player in the Malaysian market. The company is part of the top 100 brands in Malaysia, reflecting its enduring brand value and market presence. The broader economic environment, characterized by a 16% growth in the value of Malaysia’s top 100 brands, underscores the resilience of key sectors like oil and gas, banking, and tourism.

Conclusion

Genting Bhd’s first-quarter performance in 2025 highlights the volatility and challenges faced by conglomerates with diverse operations. While the leisure and hospitality division faces headwinds, the company’s palm oil business and strategic financial management provide some stability. As Genting navigates these challenges, its ability to adapt and leverage its strengths will be crucial in maintaining its position in the competitive Malaysian market.