The long-term prospects for Genting Malaysia look strong, according to Nomura research analysts, despite recording a net loss of MYR258.2 million in the three months to 31 December 2020.
Genting Malaysia’s 4Q20 results, released late Thursday, included a 57% year-on-year decline in revenues to MYR1.04 billion and a 69% fall in Adjusted EBITDA to MYR170.4 million due to property closures in Malaysia, the United States and the UK.
Adjusted EBITDA was not only down year-on-year but also 46% quarter-on-quarter due to a Movement Control Order put in place in October to prevent a second wave of COVID-19 from taking hold,
However, while Nomura’s Tushar Mohata and Alpa Aggarwal will likely continue to weigh on Genting Malaysia’s performance through 1H21, they suggested investors “consider these quarters largely irrelevant and are looking through to FY22 prospects. We tend to agree with this assessment, as FY22 outlook looks promising for Malaysia with the Skyworlds theme park scheduled to open (mid-2021), vaccines expected to be widely available by end-2021 in Malaysia, UK and USA (key markets), and some inbound tourism expected to begin.”
Genting Malaysia’s flagship Malaysian IR, Resorts World Genting (RWG), continued to steer the ship in 4Q20 with revenue of MYR644.7 million, down 60% year-on-year, and Adjusted EBITDA of MYR130.8 million.
There was improvement in the US market, where Genting Malaysia operates Resorts World New York City and Resorts World Catskills, with revenue of MYR245.5 million and positive Adjusted EBITDA of 70.9 million.
However, with UK and Egypt casinos largely closed for the period, revenues from these operations fell 73% year-on-year to MYR116.1 million with an Adjusted EBITDA loss of MYR40.9 million.
“The Group has recalibrated its operating structure and re-engineered its processes as well as its cost base to address the unprecedented challenges and to capitalize on the eventual recovery of the leisure and hospitality sector,” Genting Malaysia said in its results announcement overnight.
“The Group will also continue placing emphasis on the safety and wellbeing of the RWG community as part of the RWG StaySafe Promise.
“Meanwhile, the highly anticipated outdoor theme park, Genting SkyWorlds, is targeted to open by the middle of 2021. The theme park is a key growth initiative for the Group in Malaysia.”