Casino and casino cruise ship investor Genting Hong Kong Ltd said on Thursday that the Westside City Resorts World casino project in Manila is on track to open in 2020. The property will be the second casino resort in the Philippines capital in which Genting Hong Kong is an investor.
Travellers International Hotel Group Inc – a venture between local conglomerate Alliance Global Group Inc and Genting Hong Kong – already operates the Resorts World Manila casino resort in the Philippines. Travellers International is currently developing the Westside City Resorts World in a zone called Entertainment City in Manila.
“The Westside City Resorts World will be a 31-hectare [76.6-acre] property situated in … Entertainment City and is projected to have at least 1,500 hotel rooms,” said Genting Hong Kong in a filing to the Hong Kong Stock Exchange. The casino scheme – formerly known as Resorts World Bayshore City – broke ground in October 2014 and was originally expected to be open by 2018.
On Thursday, Genting Hong Kong reported a net loss of US$202.2 million for the six months to June 30, compared to a loss of US$53.6 million in the prior-year period. Despite an increase in revenue for the period, the group said costs rose much more rapidly. Genting Hong Kong’s earnings before interest, taxation, depreciation and amortisation (EBITDA) for the first half of 2017 was a negative US$91.7 million, compared with a negative US$28.1 million in the prior-year period.
Group-wide revenue for the period stood at US$532.5 million, up 22.2 percent from a year earlier. Revenue from cruise and cruise-related activities increased 22.7 percent year-on-year, to US$471.2 million in the first half of 2017. Revenue from non-cruise activities grew by 18.1 percent year-on-year, to US$61.3 million.
Genting Hong Kong said its share of profit from Travellers International totalled US$2.2 million in the first half of 2017, compared with US$19.1 million a year earlier. That was “primarily due to closure of the gaming area and portions of non-gaming segment [at Resorts World Manila] for most of June 2017 following the incident on 2 June,” said the Hong Kong-listed company.
Travellers International on Monday had reported a net loss of PHP311.2 million (US$6.1 million) for the second quarter of 2017. The company’s results were negatively affected by the shutdown of some areas of Resorts World Manila – including the casino – during the month of June, following a lone gunman attack that claimed 37 lives, mostly due to smoke inhalation.
In Thursday’s filing, Genting Hong Kong said its operating expenses – excluding depreciation and amortisation – increased 38.5 percent year-on-year to US$477.5 million, compared with US$344.7 million in the first half of 2016. The company said the increase in costs was mainly “due to the full six months’ operation of Genting Dream and Crystal Mozart, start-up costs of new Crystal river ships and AirCruises operations, and full six months’ start-up and new-build activities of the shipyards in Germany … as compared with its two months’ post-acquisition activities in the first half of 2016”. Genting Hong Kong acquired the shipyards in April last year.
Genting Hong Kong – a subsidiary of Malaysian conglomerate Genting Bhd – has been accelerating expansion plans for its cruise business and has developed a three-brand portfolio of cruise lines serving different parts of the market: Crystal Cruises for what it terms the ultra-luxury segment; Dream Cruises for what it describes as the premium segment; and Star Cruises for what it defines as the “contemporary” segment.
Genting Hong Kong announced an interim dividend of US$0.01 per share, to be paid on September 29.
After the reporting period, Genting Hong Kong in July sold its entire stake in Australian gaming operator Star Entertainment Ltd, expecting to record a gain of about US$67.5 million. The Hong Kong-listed firm also announced earlier this month it was reducing its participation in Norwegian Cruise Line Holdings Ltd by 3.29 percent, expecting to book a net gain of approximately US$90.1 million from the sale.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia