KUALA LUMPUR (Sept 1): RGB International Bhd (KL:RGB) expects its earnings to improve in the second half of 2026, underpinned by stronger sales of gaming machines and improved performance from its technical support and management (TSM) business.

The optimism is supported by the delivery of the remaining 1,700 gaming machines under its 3,000-machine target for the year and a recovery in TSM business, according to its chief operating officer for leisure, Chuah Eng Meng.

Eng Meng said the group is expected to grow its sales, services and marketing (SSM) business with additional integrated resorts in the Philippines and is also positioned to benefit from the replacement cycle from Macau's new electronic gaming machine technical standards.

“We submitted our tender last month for one of the major casinos in Macau. The tender is expected to conclude by the third quarter and deliver by the fourth quarter,” he added.

The replacement programme is expected to roll out progressively over the next one to two years as the casino operator upgrades its gaming floors.

On TSM, Eng Meng said the business will be “bottomed out” as RGB optimises operations by shifting machines towards better-performing outlets and exiting loss-making outlets.

“For the ones that are non-profitable in the Philippines, we are negotiating with other sites that are performing really well to add on more machines there, moving from non-performing outlets to better-performing ones,” he said.

He added that relocating machines requires regulatory approval, which RGB had obtained.

RGB’s weaker quarterly earnings were mainly due to lower margins in its SSM division, following discounts given for bulk orders from customers in the Philippines.

RGB recorded a 26.3% year-on-year decline in net profit to RM10.33 million in the second quarter ended June 30, 2026 (2QFY2026), despite revenue rising 15% to RM109.63 million, from RM94.95 million a year ago.

This brings its net profit for the first half of FY2026 to RM19.4 million, down by 26.5% from RM26.41 million, while revenue increased 16.9% to RM197.01 million.

Its executive director, Chuah Hui Jing, said discounts and additional payment terms were offered to support customers placing large orders.

“It's only for this year because they are buying a big order. Going forward, this is not the norm, it's just a one-off thing,” Hui Jing added.

RGB is also expanding into the digital gaming business in the Philippines, which expects to begin contributing to group earnings within one to two years.

“We expect this segment to start contributing to group earnings in the next one, two years,” said Hui Jing, adding that time would be needed to build marketing traction and attract players to the platform.

RGB's digital gaming business comprises three offerings – game content, game aggregation and white-label or managed services.

The group said the white-label and turnkey model could provide the larger revenue opportunity, as it operates on a revenue-sharing basis, while requiring relatively little capital expenditure.

The white-label and managed-services offering is aimed at integrated-resort (IR) operators that want to launch an online gaming brand but lack the in-house technology, operational expertise or team to do so. 

Under this model, RGB and its operating partner would provide and manage the online platform for the operator, with RGB earning a share of the revenue.

“The bulk of revenue is if we're able to get the turnkey white-label solution, because that portion is a 20-30% revenue share. 

"In the online space, GGR (gross gaming revenue) can be a lot higher. We have already put our bid for one of the IRs and are in very extensive talks, plus two more in initial discussions,” Hui Jing shared.

“There's no big CapEx [for this new digital gaming ventures]. Marketing expenses are covered by our operating partner who has a very big marketing arm in the Philippines. 

"Our expenses are mainly hiring people for customer service,” she added.