The Genting Malaysia division of conglomerate Genting Group has posted a loss of MYR1.4bn (£371.0m/€416.8m/$499.9m) for the first half of the year, due to the temporary closure of its leisure and hospitality facilities as a result of the novel coronavirus (Covid-19) pandemic.Revenue in the six months to 30 June amounted to MYR2.1bn, which was 61.2% lower than MYR5.34bn in the corresponding period last year.
Genting said that it saw a 64.3% drop in revenue from its leisure and hospitality facilities in Malaysia, with the closure of sites due to Covid-19 pushing revenue down to MYR1.31bn.
In line with Malaysian government orders, Genting closes all of its sites in the country on 18 March, and did not resume operations until 19 June. However, all of its locations in Malaysia continue to run at a reduced capacity, with Genting saying this is likely to impact its performance in the second half.
Genting also included its activities in other regions as part of its wider Malaysian business, revealing that leisure and hospitality revenue in the UK and Egypt was down 51.8% to MYR404.4m, again due to the temporary closure of casinos from mid-March to mid-August.
Meanwhile, the temporary shutdown of its casino properties in the US and the Bahamas meant leisure and hospitality revenue in these regions fell 61.2% to MYR289.1m in H1.
Genting recorded property revenue of MYR40.1m in H1, 20.3% lower than the prior year, while investment and other revenue fell 18.5% to MYR29.9m.
Adjusted loss before interest, tax, depreciation and amortisation (LBITDA) stood at MYR130.8m, compared to MYR1.40bn in positive EBITDA at the same point last year.
Pre-operating expenses amounted to MYR40.8, down from MYR144.7m in 2019, while the operator also noted MYR361.1m in impairment losses and MYR71.5m in redundancy costs for the period.
After accounting for these costs, LBITDA totalled MYR608.2, a stark contrast to MYR1.34bn in earnings during H1 last year.
Depreciation and amortisation costs were up 8.7% to MYR562.4m, while finance costs hiked 61.3% to MYR203.9m, and the operator also recorded a MYR178.7m loss from an associate.
This meant that loss before tax amounted to MYR1.49bn, compared to a profit of MYR758.8m in 2019. Though Genting did receive MYR114.0m in tax benefits, it still posted a net loss of MYR1.38bn for the first half, compared to a MYR565.2m profit last year.
As a result of the negative results in H1, Genting said it will “maintain a cautious stance” on the near-term prospects of the leisure and hospitality industry both in its native Malaysia and its other operating regions.
“The tourism, leisure and hospitality and gaming industries are among the sectors hardest hit by the pandemic,” Genting said. “As the Covid-19 situation continues to evolve, pandemic-related fears and uncertainty may result in the slow recovery of this sector.”
Looking more closely at the second quarter, revenue plummeted by 95.6% from MYR2.60bn to MYR114.9m, with the operator again citing the impact of casino closures as the reason for this.
Malaysia leisure and hospitality was down by 95.3% to MYR82.2m, while UK and Egypt revenue fell 92.1% to MYR33.2m, while US and Bahamas activities led to a MYR31.6m loss.
Adjusted LBITDA totalled MYR486.2m, compared to MYR711.5m in earnings last year, while LBITDA after other income and costs, including MYR71.5m spending related to redundancy, stood at MYR593.4m.
Loss before tax amounted to MYR1.04bn, a significant drop from MYR476.2m in profit in Q2 of 2019, and after receiving MYR121.3m in tax benefits, this left the operator with a total loss of MYR 923.2m for Q2, compared to a MYR403.1m profit last year.
“Whilst the group is encouraged by the resumption of its business in Malaysia and the UK, uncertainties surrounding the full impact of the pandemic on the group’s operations and financial performance remain,” the operator said.
“The board wishes to caution that the group expects its financial results for the financial year ending 31 December to be adversely impacted.”
The news comes after Genting’s Singapore subsidiary last month also posted its results for the second quarter, during which revenue was down by 94% year-on-year to SgD41.3m, with the closure of casinos in the country leading to a SgD$163.3m net loss for the period.
