Visitor numbers at Resorts World Genting (RWG), Malaysia’s only licensed casino property (pictured in a file photo), should only “fully recover” to pre-Covid-19 levels next year. That is according to a note from Maybank Securities Inc. A slower-than-expected recovery in visitor arrivals led the brokerage also to slash its earnings estimate for Genting Malaysia Bhd, the parent of Resorts World Genting.
“Our conversations and observations reveal that domestic and Singaporean visitor arrivals to Resorts World Genting have, more or less, fully recovered to full-year 2019 annual levels,” wrote analyst Samuel Yin Shao Yang. He noted the majority of Singaporean tourists going to Resorts World Genting enter Malaysia by land crossing.
He added that “visitors from key markets like Indonesia, Hong Kong and [mainland] China” had “not returned en masse due to low flight capacity”. But Mr Yin stated that, based on the announced “fleet strategy of Malaysian carriers”, flight capacity was poised to return to pre-Covid-19 levels by the end of the current year.
Based on its observations, Maybank cut its estimate for full-2023 visitor arrivals to Resorts World Genting to 20.8 million, compared to a prior estimate of 23.7 million.
The brokerage also cut its full-2023 earnings forecast for Genting Malaysia by 27 percent: Maybank now expects the casino operator to post earnings before interest, taxation, depreciation and amortisation (EBITDA) of MYR2.78 billion (US$603.4 million).
Mr Yin recalled that “lingering fears” related to a December 2022 landslide in the Titiwangsa Mountains – where Resorts World Genting is located – had caused first-quarter 2023 visitor arrivals to the property to “fall circa 11 percent quarter-on-quarter to 4.7 million.”
“While Resorts World Genting visitor arrivals began to improve from March 2023 onwards, the current quarter-to-date Resorts World Genting daily visitor arrivals of circa 56,000 implies second-quarter 2023 Resorts World Genting visitor arrivals of 5.1 million to 5.2 million, which is still circa 15-percent below full-year 201 annual levels”, said the brokerage.
Genting Malaysia reported first-quarter adjusted EBITDA of MYR592.9 million, an increase respectively of 43.1 percent year-on-year, and 25.4 percent quarter-on-quarter. Its Malaysia operation’s quarterly adjusted EBITDA was MYR436.5 million, up 66.0 percent from a year earlier, but down 6.6 percent sequentially, it said in a filing last month to Bursa Malaysia.
Genting Malaysia also runs casinos in the United States and in the Bahamas, the United Kingdom, and Egypt.
