Genting Malaysia has reported a loss of MYR726.3 million (US$178.6 million) for the three months to 30 September 2020, impacted the ongoing effects of COVID-19.
The results, which incorporate several one-off costs for redundancies, impairment of assets and tax deferrals – all linked to the pandemic – have been described as messy by Nomura research analysts Tushar Mohata and Alpa Aggarwal, who note impressive recovery trends on the ground at flagship Malaysian IR Resorts World Genting (RWG) through the quarter.
While Genting Malaysia booked a group-wide 46% decline in revenue to MYR1.42 billion (US$349.1 million) on significant falls at its UK and US properties, RWG fell just 34% to MYR1.18 billion (US$290.1 million). Likewise, the UK and US segments both fell to an Adjusted EBITDA loss in 3Q20, but by just 21% year-on-year at RWG to MYR424.7 million (US$104.4 million). As a result, group-wide Adjusted EBITDA was down 55% to MYR302.5 million.
“The Group’s leisure and hospitality business in Malaysia resumed operations in mid-June 2020 with reduced capacity and stringent health and safety protocols in line with guidance from the authorities,” Genting Malaysia said.
“Revenue from this quarter recovered to 66% of 3Q19 levels. The Group registered lower volume of business from the general market and non-gaming segments as RWG continues to operate under the aforementioned parameters. Nevertheless, the impact to the Group’s earnings was mitigated by recovery in the mid to premium players segment, which achieved a relatively similar level of business against 3Q19.”
Nomura’s Mohata and Aggarwal said in a Thursday note that the results in Malaysia, which included EBITDA margins of 36%, “demonstrates local demand resilience as movement curbs were lifted in 3Q20 (70% of Malaysian revenue historically has come from locals), and the effect of cost rationalization undertaken by the group.
“Since opening, volumes were picking up well in Malaysia, with 3Q20 visitor arrivals down 34% year-on-year. Casino wins in 3Q20 were at 74% of 3Q19 levels with the VIP segment being more resilient.”