KUALA LUMPUR (June 3): Electronic gaming machines distributor RGB International Bhd (KL:RGB) is banking on the Philippine and Cambodian markets to underpin its sales this year, said its deputy chief operating officer Chuah Eng Meng on Tuesday.

Chuah said the group saw an uptick in orders in the second quarter following a subdued first quarter, and expects the momentum to pick up further for the rest of the year.

The uncertainty brought by the midterm election in the Philippines and the US tariff policy had resulted in a slower first quarter amid caution in the market, he said at a briefing on RGB's financial results for the three months ended March 31, 2025 (1QFY2025).

The group's net profit fell 44.14% to RM12.4 million in the quarter, from RM22.18 million a year earlier, due to lower sales. Revenue dropped 65% to RM73.57 million from RM210.11 million.

Chuah said RGB is targeting its sales of slot machines to reach between 4,000 and 5,000 units in FY2025. During the first quarter, RGB sold 453 units of machines.

In 2024, the group sold 4,622 machines, an increase from 4,010 machines sold in 2023.

Under the 5,000 units sales scenario for FY2025, the Philippine market is expected to account for between 2,000 and 2,500 units, thanks to the ongoing expansion and new opening of integrated resorts.

Cambodia would account for about 500 units while the remaining would be orders from other markets the group has a presence in, such as Malaysia, Vietnam, Singapore, Laos and Timor-Leste.

In Cambodia, Chuah said the market will see improvement in sales this year, given that local gaming players are phasing out unlicensed and outdated machines as required by the local regulator. This is expected to spur the demand for RGB’s slot machines.

Chua said RGB sold 90 slot machines in Cambodia last year. This came after RGB signed an agreement with Firm 614 to be its exclusive agent to assist in importing, selling and distributing all kinds of gaming equipment and gaming software to all licensed gaming operators.

Chuah also said the group has started to offer the lease-to-own model for its slot machines as an alternative option to outright sale. He expects this lease-to-own model to grow this year as businesses are getting more cautious about cash flow.

“The sales for [the] lease-to-own model are starting to pick up and [are] expected to grow about 30% of the sales under sales and marketing and manufacturing of electronic gaming machines and equipment this year, from zero. A lot of it is also because of capital management. Some of the customers don't have the capital up front. So this way can help them to finance the machines,” Chuah explained.

RGB does not manufacture the machines but operates as a distributor, coordinating with manufacturers to offer outright sales and financing packages for lease-to-own, depending on customer preferences.

Meanwhile, the group is also exploring opportunities in Thailand, the United Arab Emirates and Sri Lanka, with potential long-term prospects in Japan.

On RGB's dividend policy, Chuah said the group aims to pay a dividend payout of 50% of its net profit in FY2025. In 1QFY2025, the group declared a first interim dividend of 0.4 sen, which is 50% of its earnings per share of 0.8 sen.

In FY2024, the group paid a total dividend of four sen, including a special dividend of 1.6 sen.

RGB’s share price closed up half a sen or 1.6% at 31 sen on Tuesday, bringing the group a market capitalisation of RM480 million. Over the past one year, the stock has fallen 24%.