RGB sees higher profit on gaming machines sales

GEORGE TOWN: RGB International Bhd expects a higher net pre-tax of nearly RM40mil for the financial year ending Dec 31, 2018 (FY18) compared to RM30.69mil in FY17.

Group managing director Datuk Chuah Kim Seah told StarBiz that the group has already achieved RM29mil in net profit for the nine months of FY18.

During that period, RGB’s sales of gaming machines generated RM209mil in revenue, exceeding the RM200mil targeted under its sales and marketing and manufacturing division.

“The average net profit per quarter was about RM10mil. This is why we are confident of achieving about RM40mil in net pre-tax profit this year,” he said. In 2007, the group achieved a net profit of RM39.4mil.

As its technical and support management (TSM) division generates more than half of the group’s net profit, RGB expects the division’s contribution to revenue to increase in 2019, due to a surge in demand.

“We expect to support 1,900 concession machines in 2019, compared to 1,000 this year. Barring unforeseen circumstances, a higher TSM revenue and net profit is expected in 2019.”

He said to expand its TSM division, the group has the option of either borrowing, generating fund internally or implement a fund-raising exercise.

“Currently, the group is able to provide funding for the TSM segment for about 1,000 machines yearly using internal fund,” Chuah added.

According to Chuah, the group also plans to list its TSM division in Hong Kong to raise funds for its business expansion.

“Hong Kong has a bigger capital market, which is why we are keen to pursue our plans there,” he said.

According to Chuah, the group intends to pay a higher dividend for FY19 to reward its shareholders. In 2018, the dividend paid was about 20% of its net profits.

On the capital expenditure for 2019, Chuah said the group planned to increase the budget by 25% from RM80mil in 2018.

He added that despite the increase in annual renewal licence fee to RM50,000 from RM10,000 presently, RGB expected its customers to continue ordering new gaming machines to replace the older ones currently in used.

“The recent announcement on the increase in renewal fee and gaming tax on the homefront will have little impact on the group’s net profit in 2019,” he said.