Genting Malaysian impeded by Covid but “look robust” post-2021
Nomura is lowering by 17% its 2021 revenue estimates for Genting Malaysia, due to additional restrictions to stem the further spread of Covid-19 in Malaysia.
The brokerage now expects the casino operator to report full-year revenue of nearly MYR5.25 billion, down from a previous forecast of MYR6.32 billion.
Nomura also said it expected Genting Malaysia to post a net loss of MYR651 million this year, higher than the MYR184-million loss it had predicted earlier. It also reduced the adjusted earnings before interest, taxation, depreciation and amortization forecast by 33% for full 2021, to MYR844 million.
Genting Malaysia is the operator of the Resorts World Genting casino resort near Kuala Lumpur. The company reported this month a first quarter net loss of MYR483.6 million, with revenue down 68.1% year-on-year, to just under MYR623.4 million.
The casino giant group also has casino operations in the UK and Egypt and in the US and the Bahamas.
Last week, the group again temporarily closed its casino at Resorts World Genting, because of a new so-called movement control order imposed by the government as a Covid-19 countermeasure.
Nomura analysts said in a memo that given the “current alarming situation of the Covid-19 curve” in Malaysia, and a “slow pace of vaccination” in the country, Genting Malaysia’s domestic operations “might remain depressed for at least another one to three months.”
“Further complicating matters is the government’s recent order to close the casino till further notice, with no clarity on what Covid case threshold it needs to see to allow a reopening.”
Nomura team said it believed equity investors would “likely overlook near-term bumpy earnings” as they are looking through to 2022 and 2023. The firm’s prospects “look robust” post-2021, with the Genting SkyWorlds outdoor theme park “scheduled to open, vaccine availability in key markets, and start of some inbound tourism.”
Editing by Rachel Hu