KUALA LUMPUR, Feb 8 — CIMB Equities Research says it believes the near-term outlook of Genting Malaysia could be clouded by the higher costs as it maintains its FY17-19F earnings forecasts.
The Star reported that the research house is expecting the group to record earnings growth of 24 per cent on-year for the financial year 2018 forecast (FY18F) driven by normalising of VIP hold rates as well as gaming volumes for its casinos in Malaysia.
“In our view, we think that the escalating operating and depreciation costs could outpace Genting Malaysia’s revenue growth from its new facilities in the near term, thus putting pressure on margins, at least for the first-half of 2018,” it said.
The research firm also said it believed that there could be a sequential improvement in the earnings in 4Q17, following its lacklustre earnings over the past few quarters due to a poorer VIP hold rate percentage.
Previously, for the 3Q17, VIP volumes were up double-digit while non-VIP volumes were up single-digit quarter-on-quarter.
