PETALING JAYA: Genting Malaysia Bhd saw a net loss of RM417.96 million in the first quarter ended March 31, (Q1’20) compared with a net profit of RM268.29 million a year ago primarily due to the temporary disruptions to the group’s resort operations worldwide caused by the Covid-19 outbreak.
The group’s revenue declined by 29% to RM1.96 billion from RM2.74 billion.
The Malaysian leisure and hospitality business reported lower revenue and adjusted ebitda by 36% and 40% to RM1.23 billion and RM331.2 million respectively, mainly attributable to a decrease in overall volume of business in the group’s gaming and non-gaming segments following the unprecedented disruptions to the group’s operations amid the outbreak.
Additionally, the decline in revenue was also attributable to lower hold percentage in the mid to premium players segment as compared to the same period last year. Nevertheless, the impact to adjusted ebitda was mitigated by lower costs incurred in the premium players business.
In the UK and Egypt, the group’s revenue declined 11% to RM371.2 million, primarily attributable to lower volume of business in the mass market segment, coupled with lower contributions from Crockfords Cairo in Egypt. Adjusted ebitda decreased 44% to RM22.8 million in the period.
In the US and Bahamas, the group reported a 13% decline in revenue to RM320.7 million mainly due to lower volume of business recorded at Resorts World Casino New York City (RWNYC). Adjusted ebitda was also lower by 78% to RM14.7 million, largely due to the decline in revenues registered coupled with higher payroll and operating expenses incurred at RWNYC.
During the period, the group has recognised its share of Empire Resorts, Inc (Empire)’s loss of RM100.1 million, primarily due to costs associated with the refinancing of Empire’s debts as well as depreciation and amortisation. Business volumes at Resorts World Catskills (RWC) also declined following the temporary suspension of operations at the resort since mid-March.
On its outlook, Genting Malaysia said the tourism, leisure & hospitality and gaming industries are among the hardest hit by this crisis.
In Malaysia, the pandemic and MCO have impacted both external and domestic demand, resulting in marginal economic growth and the weakening of labour market conditions. However, economic activity has gradually resumed since the government eased the MCO which allowed more businesses to operate.
“However, RWG, Resorts World Awana, Resorts World Kijal and Resorts World Langkawi remain closed until further notice. Nevertheless, the group is currently preparing for the resumption of operations and is focused on leveraging domestic demand to drive visitation and revenue. As development works on the outdoor theme park (OTP) were affected by the MCO, the group is working on a revised timeline for the completion and opening of the OTP,“ Genting Malaysia said in a statement.
In the US and Bahamas, RWNYC, RWC and RW Bimini continue to be temporarily closed until further notice. Whilst construction of RWNYC’s expansion has been halted in compliance with government directives, the group expects the development of the project to restart shortly.
In the UK and Egypt, Resorts World Birmingham, the group’s other land-based casinos in the UK and Crockfords Cairo continue to be temporarily closed until further notice. However, the group’s digital business in the UK, GentingBet, continues to operate in line with expectations.
“While the full extent of the impact of Covid-19 on the group’s financial performance and operations for the financial year ending Dec 31, 2020 (FY20) is uncertain at this point in time, the group expects its financial results for the remaining period in FY20 to be adversely impacted.”
In the meantime, the group will continue to implement various aggressive cost control measures across all its operating entities, including a reduction in operational expenditure such as payroll and related costs and the cancellation or deferment of non-essential capital expenditure.
source https://www.thesundaily.my/business/genting-malaysia-incurs-rm41796m-net-loss-in-q1-due-to-pandemic-MC2444439
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