The senior executive team of Asian-based gaming and cruise ship operator Genting Hong Kong will waive their entire salaries, and the company will cut the wages of most managers by up to 50% for the remainder of 2020 in a bid to reduce expected losses from the impact of the global coronavirus epidemic.
The company announced on Friday that the salaries and other compensation of its Chairman and Chief Executive Officer Lim Kok Thay, Deputy CEO Lim Keong Hui, Group President Colin Au Fook Yew and other directors would be fully waived, while voluntary salary reductions of between 20% and 50% has been applied to managers. According to Genting Hong Kong, 90% of managers have supported the initiative, saving the company US$15 million or “about 16% of the shore salaries and wages for the year.”
Implementation of salary reductions comes in direct response to the COVID-19 outbreak, which has seen Genting Hong Kong cease operation of its World Dream, Genting Dream, SuperStar Gemini, SuperStar Aquarius and Star Pisces cruise ships due to global travel restrictions and the temporary closure of cruise ports.
The company stated Friday that it expects the net loss of the group for the six months ending 30 June 2020 to be “much higher than the corresponding period in 2019.”
The next step in cost reduction, it added, would include a reduction in onboard crew by not renewing expiring contracts; reduction in shore headcount by not filling any vacancies or departures; reduction in all expenses, especially travel, to avoid possible virus infection; and voluntary no-paid leave.
“The Company expresses sincere gratitude and appreciation to all its employees, officers and crew for their resilience and hard work for battening down the hatches in these stormy seas and in particular, those involved in ensuring the guests onboard World Dream disembarked safely without a single infection incident in early February 2020,” Genting Hong Kong said.
“Based on the information currently available, management estimates that the Group will report an operating loss in the first half of 2020, despite efforts and measures to contain costs. The magnitude of the impact on the Group’s performance is difficult to estimate due to the rapid spread and development related to the Covid-19 outbreak.
“There are positive signs that China is starting to return to work with reopening of offices and factories; 90% of Starbucks stores are reported to have re-opened; parts of Shanghai Disney Resort re-opened on 9 March 2020 and slow improvement in sentiment.
“The Group will continue to monitor its business closely during this temporary disruption and adjust its plans in the best interest of the Group.”
Genting Hong Kong also reported that it expects to record a narrowed loss for FY19 of between US$140 million to US$170 million, down from US$224 million in 2018, excluding its share in Travellers International Hotel Group, which operates Resorts World Manila.