Maybank cuts GEN Malaysia earnings on casino shuttering

Mar 18, 2020 Newsdesk Latest News, Rest of Asia, Top of the deck  

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A brokerage said it was cutting by a third its 2020 earnings estimate for casino operator Genting Malaysia Bhd following the closure until March 31 – effective from Wednesday – of the firm’s Genting Highlands casino resort amid Malaysia’s own coronavirus alert.

The note from Maybank Investment Bank Bhd, focused on the closure of Genting Malaysia’s flagship property, Resorts World Genting, Malaysia’s only casino resort, located outside the capital Kuala Lumpur.

On Tuesday the casino company had announced also the temporary shutdown of its United States venues – Resorts World Casino New York City and Resorts World Catskills, also in  New York state.

Maybank stated in a Tuesday note, referring to the Malaysia venue: “We now assume that Resorts World Genting’s gaming volumes and visitor arrivals will fall by 30 percent year-on-year for six months. The net impact of the above is to cut our full-year 2020 earnings estimate by 33 percent.”

The revision was in the light of a “surge in Covid-19 cases in Malaysia,” said analyst Samuel Yin Shao Yang.

“Our previous full-year 2020 earnings estimate was essentially based on Resorts World Genting’s gaming volumes and visitor arrivals falling 20 percent year-on-year for three months,” he stated.

On a more upbeat note, Mr Yin observed that if Resorts World Genting’s closure were not extended beyond March 31, “visitors will trickle back”.

“Our channel checks from Macau also indicate that [mainland] China may ease outbound tourism curbs in April or May 2020 as the number of new Covid- 19 cases there has plunged,” said the institution, noting that tourists from China accounted for more than 5 percent of Resorts World Genting’s 2019 total visitor arrivals.

A statement from Resorts World Casino New York City said the closure – which it said had been imposed “temporarily” – had been decided after “careful deliberation with New York state officials and our partners at the New York Hotel Trades Council”.

Resorts World Catskills, also in New York state, said its closure to all guests had also been imposed “temporarily” and was taking effect from noon local time on Tuesday. It did not mention a specific duration for the shuttering, but noted that “all entertainment scheduled through April 30 has been postponed”.

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