Having reported its worst set of financials since 2010, with GGR at Resorts World Sentosa down 99 per cent, Genting Singapore is delaying its expansion plans as well as adapting them to the ‘new norm’ of operating.
The group suffered a net loss of $163.3m (US$119.1m) for the second quarter of 2020, the worst quarter since the opening of our Singapore Integrated Resorts, as a result of the ‘devastating effect of the Covid-19 global pandemic’ for this reporting period. The 99 per cent decline in gaming revenue at Resorts World Sentosa saw GGR fall to just S$6.5m (US$4.7m).
Genting stated: “At the onset of the pandemic, visitor arrivals dropped very significantly from February 2020. The Multi-Ministry Taskforce of Singapore directed the temporary cessation of almost all businesses (Circuit Breaker) in April 2020 to contain the spread of the virus. In line with the Singapore Government’s directive, Resorts World Sentosa suspended all guest offerings including Universal Studios Singapore, S.E.A. Aquarium, Adventure Cove Waterpark and Dolphin Island, hotels and the casino from 6 April 2020. Despite the swift implementation of a series of cost containment measures including payroll rationalisation as well as other productivity initiatives, the impact of suffering almost zero revenue was devastating. For the first half of 2020, the Group recorded a significant 98 per cent decline in earnings before interest, tax, depreciation and amortisation (“EBITDA”) to $13.3m and a net loss of $116.7m.
“With tourism being the main driver of the group’s business, our operations and financial performance have been severely impacted. Despite the swift implementation of a series of cost containment measures including payroll rationalization as well as other productivity initiatives, the impact of suffering almost zero revenue during the temporary closure period in the second quarter 2020 was devastating.”
Resorts World Sentosa reopened its casino for members on July 1, but has been forced to lay off around 2,000 of the resort’s 7,000 workforce.
It added: “With air travel reduced to a near standstill and international borders severely restricted, our commercial proposition has become non-viable in this period. As such, since March 2020, RWS has swiftly embarked on a cost control exercise including payroll savings across the board with management taking the most reduction.”
In terms of the S$4.5bn (US$3.3bn) expansion of Resorts World Sentosa it said there will be inevitable delays.
“As Singapore moves carefully towards the recovery phase from the pandemic, we are working closely with the authorities on our $4.5bn mega expansion plan (RWS 2.0) to transform our IR to be a centre piece of Singapore’s tourism,” it explained. “The timeline of the project will however be impacted due to design changes required by safety management measures and disruption to the construction industry and global supply chain caused by the pandemic. It is also envisioned that new design changes will be necessary to adapt to the post Covid-19 environment.”