Genting Malaysia’s net loss narrows in 2Q, cautious on near-term prospects of leisure industry

KUALA LUMPUR (Aug 27): Genting Malaysia Bhd’s (GenM) net loss narrowed to RM348.11 million in the second quarter ended June 30, 2021 (2QFY21), from RM900.42 million a year ago, on adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA).

Loss per share narrowed to 6.16 sen from 15.93 sen, according to the group’s bourse filing.

Revenue jumped seven-fold to RM817.87 million, from RM114.91 million in 2QFY20, on higher revenue from the leisure and hospitality businesses in the US, Bahamas, the UK and Egypt.

The group said the regional gaming market is expected to remain challenging in the short-term and it is maintaining its cautious stance on the near-term prospects of the leisure and hospitality industry.

It said revenue from its leisure and hospitality business in Malaysia more than doubled to RM237.9 million from RM82.2 million, while adjusted loss before interest, tax, depreciation and amortisation (LBITDA) improved by 56% to RM94.2 million, from RM214.7 million.

“This was mainly due to the easing of operational restrictions at Resorts World Genting (RWG), in addition to an increase in interstate travel as compared to 2Q20, which was adversely impacted by the 3-month suspension of the group’s operations from mid-March 2020 due to the pandemic. The group also reported payroll and related cost savings from lower headcount in the period,” it said.

In the UK and Egypt, the group registered a revenue of RM185.3 million, more than five times of RM33.2 million in 2QFY20, and an adjusted EBITDA of RM14.3 million from RM103.9 million.

“The recovery in earnings was predominantly due to the reopening of Resorts World Birmingham and the group’s land-based casinos in the UK since May 17, 2021, which have been well received,” said GenM.

In the US and Bahamas, GenM’s revenue increased to RM352.9 million from RM31.6 million in 2QFY20, while EBITDA adjusted to RM109.3 million, mainly attributable to the relaxation of Covid-19 restrictions in the quarter.

“The improvement in earnings was also driven by the swift recovery registered at Resorts World Casino New York City (RWNYC), with the property achieving approximately the same level of gross gaming revenue this quarter, as compared to the corresponding quarter in 2019,” it said.

On a quarter-on-quarter basis, GenM’s net loss narrowed from RM483.59 million in 1QFY21, as revenue climbed 31.2% from RM623.35 million.

For the first half of 2021, GenM said cumulative net loss narrowed to RM831.7 million compared with RM1.32 billion in the same period of 2020, despite revenue falling 30.4% to RM1.44 billion from RM2.07 billion.

This, it said, was due to the decline in its overall volume of business, as the group’s resort properties were subject to partial or full suspension of operations due to the lockdown.

The government’s announcement of a nationwide total lockdown in Malaysia will significantly impact the group’s business, following the temporary closure of RWG from June 1, 2021, according to GenM.

“In the UK, the group is encouraged by the recovery momentum seen since the resumption of its landbased casinos on May 17, 2021. The group will continue to ramp up its operations to drive revenue and business volumes, as Covid-19 restrictions are relaxed across the region,” GenM said.  

As for the US, RWNYC and Resorts World Catskills (RWC) continue to record strong rebound in demand, with the easing of pandemic-related restrictions in New York.

“The group will place increased focus on developing its strong local market exposure by leveraging synergies between RWNYC and RWC to drive business volumes and improve the overall margins of its US operations. Meanwhile, the group’s new hotel, Hyatt Regency JFK Airport at Resorts World New York, which opened on Aug 6, 2021, will also be a catalyst for growth.

“In the Bahamas, the group will continue enhancing the accessibility and infrastructure at Resorts World Bimini, in addition to capitalising on partnerships with renowned brands to drive visitation to the resort,” it added.

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