The recovery in gaming revenues for Malaysia’s only integrated resort operator, Genting Malaysia, will be “a lot more gradual” than initially expected, according to Maybank analyst Samuel Yin Shao Yang, with the investment bank now doubling its net loss estimates for the Resorts World Genting (RWG) operator in 2020.
Genting Malaysia reopened its flagship Malaysian resort to Genting Rewards members on Friday 19 June, with Resorts World Bahamas set to follow suit from 1 July and the company’s UK properties from 4 July as COVID-19 restrictions start to ease across the globe. RWG, located outside of Kuala Lumpur, had been closed since Prime Minister Muhyiddin Yassin first implemented a nationwide Movement Control Order on 18 March.
Noting that a “V” shaped recovery looks unlikely, Maybank suggested social distancing measures imposed at RWG will limit the recovery of gaming revenues going forward.
“The next two years will not be easy,” it said. “As long as the COVID-19 pandemic is raging globally, we gather that gaming revenues are unlikely to return to FY19 levels in FY21.
“We double our FY20E net loss to MYR574 million (US$134 million) and cut our FY21E net profit by 42% to MYR466 million (US$109 million).
“Only by FY22E do we trim our net profit forecast by a modest 4% to MYR1.2 billion (US$280 million) as we assume that the COVID-19 pandemic will have moderated by then.”
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