KUALA LUMPUR (May 25): Genting Bhd slipped into the red in the first quarter ended March 31, 2021 (1QFY21) with a net loss of RM331.76 million compared with a net profit of RM24.98 million in the preceding quarter, dragged by lower adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) in the current quarter and higher pre-opening expenses incurred by its indirect wholly-owned subsidiary Resorts World Las Vegas LLC (RWLV).
Revenue fell 26% to RM2.25 billion from RM3.05 billion in 4QFY20.
On a year-on-year basis, the group’s net loss widened 2.5 times in 1QFY21 from RM132.32 million a year ago, due to lower adjusted EBITDA, lower interest income and higher pre-opening expenses incurred by RWLV. These were partially offset by lower impairment losses and lower share of losses from joint ventures and associates.
Revenue for 1QFY21 declined 45% compared with RM4.12 billion in 1QFY20.
In a bourse filing, Genting said all divisions recorded decline for the quarter with the leisure and hospitality division being the main contributor to the lower revenue.
“Revenue from Resorts World Genting (RWG) declined mainly due to lower business volume from the gaming and non-gaming segments following the reimposition of a Movement Control Order, which resulted in a temporary closure of RWG from Jan 22 to mid-February. Additionally, stricter travel restrictions nationwide had resulted in lower visitation and overall business volume at RWG.
“Consequently, RWG suffered an adjusted loss before interest, taxes, depreciation and amortisation (LBITDA), which was partially mitigated by lower operating expenses and a reduction in payroll and related costs as a result of lower headcount,” it added.
It noted that the leisure and hospitality business in the UK and Egypt also recorded lower revenue mainly due to a nationwide lockdown in the UK, which took effect from early January. “Casino operations in Cairo, Egypt which had resumed operations since October 2020 continued to operate with lower business volume in the current quarter. Arising from the lower revenue from the UK and Egypt, an adjusted LBITDA was recorded, which was partially mitigated by lower operating expenses.”
As for its plantation segment, higher adjusted EBITDA was recorded in 1QFY21 mainly attributable to better margins from higher palm products selling prices. Meanwhile, the power division saw lower revenue and adjusted EBITDA mainly due to the Banten Plant in Indonesia which was shut for about a month in the current quarter for a scheduled minor outage.
On prospects, Genting said its performance for the remaining FY21 may be impacted by uncertainties surrounding the global outlook, given the evolving Covid-19 situation.
“In Malaysia, the reinstatement of stricter containment measures in various locations due to a resurgence in Covid-19 cases will affect economic activities in the near term,” it noted.
Genting added that the health and safety of the RWG community remain central to the group’s efforts. “While it continues to work towards the completion of Genting SkyWorlds outdoor theme park in the third quarter of 2021, the opening date of the park is dependent on developments surrounding the Covid-19 situation and its impact on the leisure and hospitality sector in the country.”
“The outlook for the tourism, leisure, and hospitality industries remains highly uncertain as recovery setbacks persist amid ongoing travel restrictions in response to the pandemic. Consequently, the regional gaming market will continue to face significant challenges in the short term.
“The group maintains its cautious stance on the near-term prospects of the leisure and hospitality industry,” it said.
Shares of Genting Bhd rose 10 sen or 2.08% to close at RM4.91 today, valuing the group at RM19.04 billion.
