Genting Malaysia’s flagship IR Resorts World Genting (RWG), located outside the capital city of Kuala Lumpur, will likely remain closed for three months and the opening of its new theme park delayed until December as a result of Malaysia’s latest COVID-19 lockdown.
The potential impact of the country’s Movement Control Order, which saw RWG suspend operations for a third time from 31 May, was outlined in a Tuesday note from Maybank Research which saw analyst Samuel Yin Shao Yang slash his earnings estimates for Genting Malaysia in 2021.
He has also widened his expected core net loss for the company by 76% to MYR676 million (US$164 million) on a likely 29% fall in visitation, from a previous estimate of 12 million visitors in 2021 to just 8.5 million.
“RWG was shut for three months from 18 March to 18 June 2020 and shut again for 25 days from 22 January to 15 February 2021,” Yin said in Tuesday’s note.
“We gather that RWG will be shut for three months this time and Genting SkyWorlds will only open in December 2021 to coincide with school holidays (10 December to 31 December 2021). Thus, we cut FY21E RWG visitor arrivals … and widen FY21E core net loss by 76%.”
Despite the considerable impact of yet another closure in Malaysia, Yin noted that the estimated 2021 loss would still be less than half the MYR1.45 billion (US$350 million) loss recorded in 2020 given the recent reopening of Genting Malaysia’s UK casinos and strong recovery at its US properties.
Resorts World New York, Yin said, is already back to pre-COVID levels while Resorts World Catskills has recovered to 84%.
He also predicted another strong rebound for RWG once this latest Malaysian outbreak eases, with 2022 estimates unchanged at a net profit of MYR1.04 billion (US$252 million).
“COVID-19 vaccination is expected to surge from June 2021 to 150,000 per day as Malaysia takes delivery of 16 million COVID-19 vaccine doses,” he said.
“This will bring down the number of new-COVID-19 cases and hopefully preclude RWG from shutting going forward. RWG visitor arrivals rebounded quickly when it reopened and interstate travel was allowed in 3Q20.”
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