KUALA LUMPUR (May 25): Genting Malaysia Bhd (GENM) continued to bleed in its first quarter ended March 31, 2021 (1QFY21), as net losses widened to RM483.59 million or 8.55 sen per share, from RM417.96 million or 7.39 sen per share in 1QFY20, due to the temporary closure of the group’s businesses in Malaysia and the UK.
Revenue in 1QFY21 tumbled 68.13% to RM623.35 million from RM1.96 billion a year ago, according to a bourse filing.
It is worth noting that the group had been loss-making for six consecutive quarters since 1QFY20, on pandemic woes.
In a separate statement, GENM said the leisure and hospitality business in Malaysia recorded a 76% decline in revenue to RM299 million and adjusted loss before interest, tax, depreciation and amortisation (LBITDA) of RM83.6 million.
“This was predominantly due to the suspension of the group’s resort operations from Jan 22 until mid-February, in compliance with the government’s implementation of a second Movement Control Order, and the subsequent reopening of the properties with reduced capacity.
“Additionally, stricter travel restrictions nationwide had resulted in lower visitation and overall business volume at Resorts World Genting (RWG),” it said.
Nevertheless, the impact to the group’s earnings were mitigated by a reduction in operating expenses, as well as payroll and related cost savings from lower headcount, it added.
In the UK and Egypt, revenue from the group’s operations decreased by 89% to RM40.2 million and the group registered adjusted LBITDA of RM51.7 million, mainly due to the temporary closure of Resorts World Birmingham and the group’s other land-based casinos in the UK, amid a nationwide lockdown to curb the spread of Covid-19.
Additionally, Crockfords Cairo had recorded lower volume of business.
“The impact to the group’s earnings were mitigated by lower operating expenses,” it added.
In the United States of America (US) and Bahamas, revenue from the group’s leisure and hospitality business declined by 20% to RM256.3 million. The decrease was primarily due to the reduced operating capacity at Resorts World Casino New York City (RWNYC), in compliance with government directives, in addition to a statewide curfew on casinos.
Nevertheless, the group reported adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of RM68.6 million, an improvement of nearly five times from the same period last year. The recovery in earnings was aided by payroll cost savings and lower operating expenses at RWNYC.
On a quarter-on-quarter basis, GENM’s net loss expanded from RM240.85 million in the immediate preceding quarter, with lower revenue posted compared with RM1.04 billion in 4QFY20.
Meanwhile, GENM maintains its cautious stance on the near-term prospects of the leisure and hospitality industry, given that the industries’ outlook remains highly uncertain, as recovery setbacks persist amid ongoing travel restrictions in response to the pandemic.
Consequently, the regional gaming market will continue to face significant challenges in the short-term,” it added.
In Malaysia, GENM said the imposition of a third Movement Control Order (MCO 3.0) nationwide will continue to adversely impact the group’s business, following the temporary closure of RWG’s casino operations from May 24.
The group will continue to assess its operating structure to align its cost base to the challenging operating and business environment. The health and safety of the RWG community remain central to the group’s efforts.
“While the group continues to work towards the completion of Genting SkyWorlds outdoor theme park in the third quarter of 2021, the opening date of the park is dependent on developments surrounding the Covid-19 situation and its impact to the leisure and hospitality sector in the country,” it added.
In the UK, the group’s land-based casinos have reopened since May 17. It will focus on driving revenues and business volume at its venues, while adopting an agile approach in managing its cost structure and business model to better adapt to the new operating environment.
In the US, the group remains committed to reinforcing its position in the New York State gaming market by leveraging synergies between RWNYC and Resorts World Catskills to develop and grow its strong local market exposure.
Meanwhile, preparations are in place for the opening of the new 400-room Hyatt Regency JFK at Resorts World New York hotel from the middle of 2021, it said.
“With the roll-out of new amenities at RWNYC, the expansion project will improve RWNYC’s competitive position in the region, in addition to providing the group with an ideal platform for growth.
“In the Bahamas, the group will continue to focus on driving visitation and spending at RW Bimini,” it added.
GENM’s shares closed up six sen or 2.23% at RM2.75 today, valuing the casino operator at RM16.33 billion. The counter has been trading between RM1.98 and RM3.31 over the past year.