Casino operator Genting Malaysia Bhd narrowed its quarterly loss nearly 22 percent sequentially in the three months to September 30.
Such loss was just over MYR704.6 million (US$173.2 million) in the third quarter, compared to MYR900.4 million in the second quarter, the group told Bursa Malaysia in a Thursday filing.
The firm, which runs Malaysia’s only casino resort, Resorts World Genting (pictured), also operates casinos in the United Kingdom and Egypt, and in the United States and the Bahamas.
Genting Malaysia’s third-quarter results were “messy”, said a Friday memo from banking group Nomura, noting there were “several one-offs to account for redundancy costs, impairments of assets, and deferred tax asset reversals, all due to Covid-19,” added analysts Tushar Mohata and Alpa Aggarwal.
Operations at Genting Malaysia’s main money maker, Resorts World Genting, were suspended from March 18 until June 19, as part of national efforts to contain the novel coronavirus associated with the Covid-19 infection. Subsequently the complex has been running at reduced capacity as a safety precaution.
Despite the challenging trading conditions, Genting Malaysia paid on September 29 an interim, single-tier dividend of MYR0.06 per ordinary share – amounting in total to MYR339.2 million – for the 12 months to December 31 this year.
The casino group’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) were positive in the third quarter, to the tune of MYR310.7 million, but were nonetheless down about 55 percent on the MYR694.4 million achieved in the third quarter of 2019.
Adjusted EBITDA for the three months to September 30 this year were nonetheless much better than the second quarter, when such EBITDA had been negative by MYR486.2 million.
The Nomura analysts observed: “What really struck us [positively] was the revenue/margins generated by the Malaysian resort, with revenue at 66 percent and EBITDA at 79 percent of year-ago levels, and EBITDA margins of 36 percent in Malaysia.”
Third-quarter revenue group wide – including from “leisure and hospitality” encompassing casino gambling, and most of it attributable to Resorts World Genting – was nearly MYR1.42 billion, down about 46 percent on the nearly MYR2.63 billion achieved in the third quarter 2019.
The group said in commentary that the decrease in the group’s overall third-quarter revenue was mainly due to a 34 percent – or MYR614.9 million – reduction at the Malaysia operation; as well as “lower revenue from the leisure and hospitality businesses in the U.S. and Bahamas by MYR285.9 million or 80 percent, mainly due to the temporary closure of Resorts World Casino New York City,” which had resumed operations with reduced capacity – after a period of closure – from September 9.
The group’s share of losses in an associate, Empire Resorts Inc – which runs Resorts World Catskills, in upstate New York – was MYR62.0 million during the quarter. The losses comprised its share of Empire Resorts’ operating loss of MYR20.3 million, and financing costs, as well as depreciation and amortisation of MYR41.7 million.
The group also said it had reduced its costs – including its wage bill – during the quarter. This was “as a result of the recalibration of the group’s operating structure and right-sizing of its workforce in response to the unprecedented disruptions to the group’s operations amid the Covid-19 pandemic,” Genting Malaysia said.
Cash and cash equivalents held by Genting Malaysia were down 43 percent year-on-year by the end of the third quarter, to just under MYR3.69 billion, versus nearly MYR6.48 billion in the third quarter of 2019.
