GGRAsia – GEN Malaysia 3Q down on 2Q while flagship shut say analysts

GEN Malaysia 3Q down on 2Q while flagship shut say analysts

Aug 27, 2021 Newsdesk Latest News, Rest of Asia, Top of the deck

Genting Malaysia Bhd’s third-quarter results are likely to be worse than the second quarter’s, a period when the group’s flagship casino complex in Malaysia, Resorts World Genting (pictured), was shut during the whole of June as a Covid-19 countermeasure, said banking group Nomura, in a Friday note.

That was on the basis that the shutdown at Resorts World Genting, announced on May 31, had already extended into the first two months of the third quarter, and might last for all of it.

Nomura analysts Tushar Mohata and Alpa Aggarwal estimated Genting Malaysia had a “cash burn” of approximately MYR3.5 million (US$834,900) per day “including interest”, for the resort’s closure.

In the second-quarter results announced on Thursday, Genting Malaysia said it had significantly narrowed its quarterly loss year-on-year, thanks to factors including reopening of its casinos in the United States and the United Kingdom. But it still registered a group-wide loss amounting to MYR348.1 million.

“Malaysian operations still reporting a loss at the EBITDA [earnings before interest, taxation, depreciation and amortisation] level, due to travel bans and a complete shutdown of the casino since end-May which continues till date,” stated the Nomura analysts.

Maybank Investment Bank Bhd reiterated in its Friday note following the second-quarter numbers, that it expected Resorts World Genting “to remain shut for another two months and reopen in November”.

Nomura was a little more bullish on the possible reopening timetable for Malaysia’s only casino resort, located in a upland area outside the capital, Kuala Lumpur.

“We believe that the case for allowing a reopening of the resort by end-September/ early-October for vaccinated visitors is strong, given the high inoculation rates in the surrounding areas of Klang Valley,” wrote the Nomura analysts.

“We think the policymakers are also cognisant that the closure has dragged on for too long,” they added.

Maybank analyst Samuel Yin Shao Yang observed in his note: “With any luck, we gather that losses will narrow markedly in fourth-quarter 2021 as visitors return to Resorts World Genting.”