Genting Hong Kong has outlined a broad range of cost reduction, cash conservation and capital raising measures currently being undertaken as it braces for growing losses due to the global COVID-19 pandemic.
Issuing a profit warning to investors on Monday, Genting HK said it expects its net loss for the six months to 30 June 2020 to be “significantly higher” than the corresponding 2019 loss of US$56.5 million, with the suspension of cruise services and restricted operations in its entertainment and leisure businesses severely limiting revenue.
The company operates three cruise lines – Dream Cruises, Crystal Cruises and Star Cruises – as well as a shipbuilding operation at MV Werften shipyards in Germany. It is also a joint venture partner in Philippines IR Resorts World Manila and owns Zouk nightclub in Singapore.
Genting HK listed a series of cost cutting measures on Monday, namely a reduction in staff, salary reductions and the implementation of no pay leave for employees; suspending all capital expenditures; delaying delivery of new cruise ships Crystal Endeavor and Global Dream for 12 months; and laying up most of its current fleet. The exceptions to the latter measure are Explorer Dream, which commenced domestic voyages in Taiwan last week, plus SuperStar Aquarius and SuperStar Gemini which have been leased to the Singapore Government as quarantine vessels.
Liquidity-boosting measures include seeking additional sources of finance from Germany’s Economic Stabilization Fund to fund the resumption of construction work at its German shipyards as well as seeking additional sources of finance to maintain its cruise businesses, pending resumption of sailing.
“It is expected that the COVID-19 pandemic will continue to affect the Group’s businesses, as the spread and development of the virus has created significant uncertainty over when authorities in the relevant cruising markets will allow resumption of the cruise travel,” Genting HK said.
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