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Malaysia – Genting Malaysia Berhad lags in third quarter by 42 per cent

By - 26 November 2021

The reopening of Resorts World Genting (RWG) in Malaysia since September 30 2021 has been ‘well received’ although owner Genting Malaysia Berhad (Group) saw its third quarter revenues slide by 42 per cent to RM826.3m.

Despite the impact of the Coronavirus Disease 2019 (COVID-19) disruptions on the Group’s operations, the Group recorded adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of RM53.7m in 3Q21, aided by the recovery of the Group’s overseas operations. Nevertheless, the Group’s . Taking into account depreciation and amortisation, finance costs and the Group’s share of results in an associate, the Group reported loss before tax (LBT) of RM379.2m while net loss improved by 58 per cent to RM307m.

The Group’s leisure and hospitality business in Malaysia recorded a 99 per cent decrease in revenue to RM17.7m and an adjusted LBITDA of RM164.8m. This was primarily due to the temporary closure of RWG since 1 June 2021 in compliance with a government directive of a nationwide total lockdown. Nevertheless, lower operating expenses coupled with payroll and related cost savings mitigated the impact to the Group’s earnings. RWG has resumed operations since 30 September 2021 to positive response.

In the United Kingdom (UK) and Egypt, the Group achieved revenue of RM406m, more than three
times of the level recorded in the same period last year (3Q20), and adjusted EBITDA of RM102.1m.
The recovery in revenue and earnings was mainly driven by the re-opening of the Group’s land-based
casinos in the UK since mid-May 2021 and the progressive easing of COVID-19 restrictions across the
region. By comparison, the Group’s casinos were largely closed in 3Q20, while certain venues resumed
operations with reduced capacity from mid-August 2020. The Group’s adjusted EBITDA in 3Q21 was also
attributable to higher debt recovery.

In the United States of America (US) and Bahamas, the Group reported revenue of RM364.2m, more
than five times of the level recorded in the same period last year (3Q20). The Group also registered
adjusted EBITDA of RM120.4 million in 3Q21 from an adjusted LBITDA of RM71.7 million in 3Q20. These
improvements were predominantly due to the strong operating performance registered at Resorts World
New York City (RWNYC) since the full lifting of COVID-19 restrictions in June 2021, with the property
achieving gross gaming revenue surpassing pre-pandemic levels. By comparison, RWNYC was largely
closed in 3Q20 as it reopened with reduced capacity in compliance with COVID-19 restrictions from 9
September 2020.

Meanwhile, the Group’s associate, Empire Resorts, Inc. (Empire), had registered marked improvements in
its operating performance following the full relaxation of COVID-19 restrictions since June 2021, with gross
gaming revenue at Resorts World Catskills (RWC) also exceeding pre-pandemic levels in 3Q21.
The operator said: “The recovery of the global economy is expected to continue, supported by sustained progress in
vaccination programmes worldwide and the relaxation of containment measures. However, downside risks
to global growth remain, given uncertainties surrounding the evolution of COVID-19, ongoing supply chain
disruptions, escalating energy prices and inflationary risk. The recovery momentum of the Malaysian
economy is expected to improve in line with the rally of the global economy and continued implementation
of domestic economic and fiscal stimulus measures.

The operator said: “The tourism industry is expected to continue recovering with the increase in vaccination rates and easing of border crossing restrictions worldwide. The introduction of the Twelfth Malaysia Plan, with the tourism industry as one of the key focus areas, will augur well for the Group as a leading player in the leisure and hospitality sector in Malaysia and the region. As for the regional gaming market, the introduction of vaccinated travel lanes between certain countries will provide a positive catalyst for industry players. Against this backdrop, the Group is cautiously optimistic on the near-term prospects of the leisure and hospitality industry.

“In the UK and Egypt, the Group remains steadfast in executing various strategies to strengthen the
resilience of its business by streamlining and reorganising its operations to optimise efficiencies. At the
same time, the Group will place emphasis on driving business volume and revenue at its properties as it
continues to capitalise on improving consumer sentiments following the lifting of COVID-19 restrictions.
In the US, the Group will continue to strengthen its market leading position by pursuing growth
opportunities in New York. This includes the development of Empire’s new video gaming machines facility,
Resorts World Hudson Valley in Orange County, New York, which is targeted to open in the summer of 2022.”

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