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Genting set to break even in fourth quarter

admin2021-10-0816

The reopening of Resorts World Genting (RWG) on Sept 30, 2021, which was a month earlier than expected, will drive earnings recovery for Genting Malaysia, said Maybank Investment Bank (Maybank IB).

KUALA LUMPUR: Genting Malaysia Bhd is expected to finally break even in the final quarter of this year, following six consecutive quarters of core net losses primarily due to business disruptions caused by the pandemic.

The reopening of Resorts World Genting (RWG) on Sept 30, 2021, which was a month earlier than expected, will drive earnings recovery for Genting Malaysia, said Maybank Investment Bank (Maybank IB).

“RWG has been shut since late May 2021. With new Covid-19 cases easing due to rising vaccinations, Genting Malaysia reopened RWG on Sep 30, 2021.

“Only Pahang residents will be allowed to visit RWG for now but we believe that residents from other states will be visiting soon when 90% of Malaysian adults are fully vaccinated,” the research house said in a report yesterday.

The national vaccination rate currently hovers over 85%.

Maybank IB said its estimates and target price for Genting Malaysia remains unchanged for now, as October is traditionally not very busy.

Additionally, the research house said the next earnings growth catalyst for Genting Malaysia will be the opening of the much delayed RM3bil Genting SkyWorlds theme park at RWG.

“We maintain our view that it will open in December 2021 to coincide with the school holidays. Going forward, we are confident that it will attract both gaming and non-gaming visitors to RWG.

“Our 2022 and 2023 core net profit estimates are based on visitor arrivals of 24.2 million and 26.2 million people, respectively. In short, we expect some sort of normalcy resembling pre-Covid-19 levels returning in 2022.”

As RWG had been shut for nearly the entire third quarter of 2021, Maybank IB said it expects Genting Malaysia to generate a core net loss during the quarter.

The research house said the quantum of loss should be similar to the RM353.4mil loss that Genting Malaysia sustained during the second quarter of 2021.

“That said, we expect Genting Malaysia to break even in the fourth quarter of 2021, thanks to RWG’s reopening.

“Recall that when RWG first reopened post-Covid-19 in the third quarter of 2020, it welcomed four million visitors. Thus, we are comfortable with our 2021 estimates.”

Genting Malaysia’s revenue for the second quarter ended June 30, 2021 leapt by more than seven times to RM817.9mil from RM114.9mil in the same quarter a year ago.

Its net losses also narrowed to RM348.1mil from a net loss of RM900.4mil in the same quarter a year ago.

Genting Malaysia shares closed 0.33% higher at RM3.05 yesterday.


转载说明:本文转载自Sunbet。

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