The loss of a US$426 (MYR1.8 billion) investment in a US tribal casino development saw Genting Malaysia record a net loss of MYR791.7 million in 3Q18, despite revenue growing 15% year-on-year to MYR2.6 billion.
The loss relates to a ruling by the US Department of Interior (DOI) in September that Mashpee Wampanoag Tribe could not develop a planned integrated resort in Massachusetts. Genting Malaysia had previously purchased promissory notes to the value of US$426.3 million issued by the Tribe.
In a filing with Bursa Malaysia, Genting Malaysia said the substantial loss was due to the uncertainty of recovery of the group’s investment after the DOI’s decision concluding that the Tribe did not satisfy the conditions under the Indian Reorganization Act that allow the Tribe to have the land in trust for an integrated gaming resort development.
“However, the group continues to work closely with the Tribe on options which include a legislation being introduced in the US Congress which, if passed, will entail the US Federal Government to reaffirm the land in trust for the benefit of the Tribe,” the company said. “The impairment loss can be reversed when the promissory notes are assessed to be recoverable.”
More positive was the performance of the company‘s flagship Resorts World Genting property, which saw 3Q18 revenue jump 26% to MYR1.7 billion and Adjusted EBITDA grow 91% to MYR641.2 million.
The increase was primarily due to strength in the mass market segment following the opening of new facilities and attractions under the Genting Integrated Tourism Plan (GITP), with 6.4 million people visiting the property during the quarter.
Resorts World Genting also enjoyed higher hold in the VIP segment, Genting Malaysia said.
Operations at Genting Malaysia’s UK and Egypt properties declined by 2% for the period to MYR505.7 million, with Adjusted EBITDA up 12% to MYR60.2 million.
Genting Malaysia added that it doesn’t expect a US$1 billion lawsuit launched late last month against Walt Disney Co and Twenty-First Century Fox Inc for allegedly reneging on a contract to build a Fox theme park at Resorts World Genting to impact the group’s current business operations.
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