Other Genting Malaysia Bhd casinos outside Malaysia are likely to “reopen soon” after a period of shutdown due to the Covid-19 pandemic, following earlier news that the firm’s flagship, the Resorts World Genting complex near Kuala Lumpur, is back in action, said a Sunday note from Maybank Investment Bank Bhd.
But the bank warned that it expected Genting Malaysia’s recovery toward something like 2019 earnings to be “a lot more gradual than we initially expected,” possibly only by 2022.
A “’V’ shaped recovery” was “unlikely”, said the institution.
“We double full-year 2020 net loss, cut full-year 2021 net profit by 42 percent, but trim full-year net profit by a narrower 4 percent,” said the memo from Samuel Yin Shao Yang.
Maybank now thinks that Genting Malaysia’s group-wide net loss will be MYR573.7 million (US$133.9 million) in 2020, versus its previous estimate of a loss of MYR280.5 million. For 2021, the bank thinks net profit will be MYR466.4 million, versus its prior forecast of MYR801.5 million. By 2022, the institution thinks group core net profit can reach nearly MYR1.20 billion.
Social distancing measures imposed at Resorts World Genting in Malaysia were “an indication of things to come and it will limit the recovery of gaming revenues,” suggested Mr Yin, adding his institution estimated Resorts World Genting reopened at “effectively” 35 percent to 45 percent capacity.
He added there was “no indication” when capacity limits would be “raised or lifted” and they might last until the end of Malaysia’s so-called Recovery Movement Control Order period which is due to expire on August 31 “at earliest”, said the analyst.
“Resorts World Genting could try to raise minimum bets but we are unsure if this will be productive as Malaysia is very likely in a recession already,” added Mr Yin.
Resorts World Genting reopened its casino to selected high-value customers on June 19, while Genting Malaysia’s properties in the United Kingdom and Resorts World Bahamas in the Bahamas would “reopen on 4 July [Saturday]… and 1 July [Wednesday] 2020 respectively,” suggested Maybank.
Mr Yin added that the group’s United States venues, Resorts World Casino New York City and Resorts World Catskills in upstate New York, had not yet flagged intention to reopen but it was likely to be only “a matter of time before they do as the Covid-19 pandemic is easing in New York”.