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Genting Malaysia Is on a Path to a Steady Recovery in Q3 but Treads Carefully Before Uncertainties Ahead

Article by : Helen Dec 14, 2020

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Genting Malaysia, a gaming, resort, and hotel operator with 40 years of experience under its belt and properties both in Malaysia and in the United Kingdom, Egypt, the United States, and the Bahamas, has released its financial results for the third quarter of 2020 and the first nine months of the year.

3Q20 still wasn’t what could be called ‘back to normal’ for Genting Malaysia. Compared to 3Q19, the casino operator managed to bring in only 54% of the revenue. The year-on-year decrease in total revenue for 9M20 is at the same level – 56%. While the company’s performance remains heavily undercut by the coronavirus pandemic, its quarterly losses before taxation are lower than in 2Q20. And, what’s even more promising, the adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) were positive in 3Q20, amounting to RM310.7 million (roughly 76.3 million in US dollars).

The financial results of the first nine months of 2020 still remain bleak, mostly due to the losses in 2Q20 caused by the shutdown of Genting’s Malaysia-based venues from March to June, as well as international facilities’ losses that bled into 3Q20. The overall financial losses that Genting Malaysia has suffered in the first nine months amounted to RM1.85 billion (roughly US$455 million).

While the casino operator’s Malaysia venues have been reopened and up and running throughout the whole third quarter, the casino operator’s facilities in the UK were temporarily shut down once more on November 4 – after operating for only two and a half months – due to the degrading coronavirus situation in the country. The US-based RWNYC and Resorts World Catskills continue welcoming guests after they resumed their operations in September.

No wonder that Genting’s Malaysia venues are the driving force behind the positive adjusted EBITDA for the first nine months of 2020 – they are the only ones to bring the positive figures (RM541.2 million, which is equivalent to 132.97 million in US dollars). The UK, Egypt, and US and Bahamas properties all turned in negative adjusted EBITDA. In fact, the UK and Egypt venues finished the third quarter with the adjusted loss before interest, taxation, depreciation, and amortization of RM50.5 million (equivalent to 12.4 million in US dollars) and a year-on-year decline in revenue of 68%. All of this is due to coronavirus shutdowns in both countries throughout the quarter.

In the United States and the Bahamas, Genting Group suffered an 80% year-on-year decline in revenue and an adjusted EBITDA of RM71.7 million (17.6 million in US dollars), mostly due to being forced to temporarily close its Resorts World Casino New York City venue.

All in all, despite a silver lining in the form of a positive adjusted EBITDA, Genting Malaysia remains cautious about what the future holds for it. As stated in the casino operator’s recent press release, “The Group maintains its cautious stance on the near-term prospects of the leisure and hospitality industry. Given the dynamic operating environments both locally and abroad, uncertainties surrounding the full impact of the pandemic on the Group’s operations and financial performance remain.”

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