Casino cruise ship operator Genting Hong Kong Ltd expects an unaudited loss of at least US$1.5 billion for the year to December 31, compared to a US$159-million loss a year earlier, it said in a Friday filing to the Hong Kong Stock Exchange.
The company said the increased annual loss would be “mainly attributable to prolonged suspension of fleet-wide operations across the group’s cruise and cruise-related businesses,” due to the Covid-19 pandemic. Such suspension had begun “temporarily since February 2020”.
Genting Hong Kong – part of the Malaysia-based Genting group – controls the Dream Cruises, Crystal Cruises and Star Cruises brands. The firm is also an investor in the Resorts World Manila casino resort in the Philippines.
Friday’s filing noted that from March to October last year, there had been suspension of operations at the MV Werften shipyards the group controls in Germany.
The various pauses in business amid the pandemic had led to “impairment losses being recorded on certain intangible assets, property, plant and equipment and other assets and loss on disposal of interest in certain subsidiaries which owned non-core assets,” said Genting Hong Kong in its announcement.
Genting Hong Kong said in November last year it had agreed to sell a 50-percent stake in a subsidiary – Genting Macau Holdings Ltd – involved in the development of a hotel project in Macau.
The group’s consolidated operating loss for 2020 would be at least US$600 million, versus US$96 million in 2019, noted Genting Hong Kong in its latest filing.
The company noted however that it had been working with individual locations to run small-scale operations.
These had included the Dream Cruises brand’s vessel Explorer Dream (pictured) being allowed to operate “two-, three- and four-night “Taiwan Island-Hopping” cruises from 26 July.
Dream Cruises’ World Dream vessel had been permitted to run “domestic cruises” in Singapore since November, “with positive… contribution” to the group’s earnings before interest, taxation depreciation and amortisation, said the filing.
The filing also noted that Genting Cruise Lines had announced recently that Crystal Cruises would be running what it called “Close-to-Home Bahamas Escapes” from Nassau and Bimini in the Bahamas, beginning in July this year.
Genting Hong Kong said this would mean its Crystal Serenity would be “the first ocean ship to sail from the Americas since the cruise industry’s voluntary halt in operations almost a year ago”.
“With the resumption of Crystal Serenity, Genting Cruise Lines will have 41 percent of its entire fleet in operation (based on total lower berths), the highest proportion of all cruise companies in the world, following the restart of Dream Cruises’ Explorer Dream in July 2020 in Taiwan and World Dream in Singapore in November 2020,” stated Friday’s filing.
In August, Genting Hong Kong had said it was pausing fresh investment, as its first-half 2020 loss had topped US$742 million.
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Andrew Lee and David Katz
Analysts at brokerage Jefferies LLC