GGRAsia – Genting HK top executives waive pay, firm to cut jobs

Genting HK top executives waive pay, firm to cut jobs

Mar 16, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck

Genting Hong Kong Ltd, an operator of casino cruise ships and an investor in Asian land-based casinos, says it is moving to a new phase of cost reduction in a bid to limit the expected loss for the first six months of 2020, due to the negative impact of the Covid-19 virus. The company announced on Friday that its top executives had “waived 100 percent of fees and compensation from February 2020 till the end of this year”.

Executives affected by the decision include the company’s chairman and chief executive, deputy chairman, deputy CEO, directors and group president, the firm said in a Friday filing to the Hong Kong Stock Exchange.

Genting Hong Kong confirmed to GGRAsia in February that one of its units – Genting Cruise Lines – was cutting salaries for its senior staff by between 20 percent and 50 percent because of the negative impact on business of the novel coronavirus. Genting Cruise Lines operates three distinct ship-based holiday brands – Star Cruises, Dream Cruises and Crystal Cruises.

In Friday’s filing, Genting Hong Kong said that about 90 percent of the group’s managers had “supported the initiative,” contributing to “saving US$15 million, or about 16 percent of the shore salaries and wages for the year”.

The company said additionally that it would be implementing further cost reduction measures. They included: a reduction in on-board crew by not renewing expiring contracts; a reduction in the onshore workforce by not filling any vacancies and not replacing staff that were leaving; a reduction in all expenses – especially travel – to avoid possible virus infection; and voluntary no-pay leave.

Genting Hong Kong said it expected the net loss for the six months ending June 30 to be “much higher” than the corresponding period in 2019. The expected increase in such net loss “is mainly due to the … Covid-19 outbreak, which has resulted in widespread travel advisories [warnings by governments] and temporary closure of cruise ports,” stated the firm.

The company had said in February that the cruise business environment in 2020 would “continue to be challenging” due to the Covid-19 pandemic. The group had cancelled several of its scheduled voyages – across its three cruise brands – from late January. It said some cruise vessels were expected to resume operations in April.

“The magnitude of the impact on the group’s performance is difficult to estimate due to the rapid spread and development related to the Covid-19 outbreak,” said Genting Hong Kong in its latest filing.

A number of investment analysts covering the cruise business said they expected a steep decline in new bookings and elevated cancellations throughout the industry in 2020, followed by a partial recovery in 2021.

Genting Hong Kong said in Friday’s document that it expected a net loss in the range of US$140 million to US$170 million for the year ended December 31, 2019. That compares to a consolidated net loss of US$224 million in the prior year.

The numbers contained in its most recent update did not include the contribution from Travellers International Hotel Group Inc, the joint venture that operates the Resorts World Manila casino resort in the Philippines.