Genting, GenM record losses for 1Q

by SHAZNI ONG/ pic credit:

GENTING Bhd and Genting Malaysia Bhd (GenM) put in a weak start for their financial year 2020 (FY20) as they posted net losses for the first quarter ended March 31, 2020 (1Q20).

Genting posted a net loss of RM132.32 million in 1Q20 compared to a net profit of RM561.64 million in the same quarter last year, while revenue fell 26.26% year-on-year (YoY) to RM4.11 billion.

Genting said the loss for the current quarter was mainly due to the lower Ebitda, impairment losses of RM482.5 million, as well as a share of loss from joint ventures (JVs) and associates of RM108 million compared to a share of profit in 1Q19.

“The impairment losses arose mainly from GenM group’s investment in certain assets,” it said in a statement yesterday.

The share of loss from JVs and associates was mainly due to GenM group’s share of loss in an associate, namely Empire Resorts Inc of RM100.1 million that arose mainly from GenM group’s share of costs associated with the refinancing of Empire’s loans, as well as depreciation and amortisation, while its share of Empire’s operating loss was RM13.5 million.

Meanwhile, GenM recorded a net loss of RM417.96 million in 1Q20 compared to a net profit of RM268.29 million in 1Q19, as revenue dropped 28.5% YoY to RM1.95 billion.

“This was primarily due to the temporary disruptions to the group’s resort operations worldwide caused by the Covid-19 outbreak which severely impacted business volumes,” it said in a statement yesterday.

On its outlook, GenM said while the full extent of the impact of Covid-19 on the group’s financial performance and operations for the FY20 ending Dec 31 is uncertain at this point in time, the group expects its financial results for the remaining period in FY20 to be adversely impacted.

Shares of Genting closed yesterday one sen higher at RM4.08, valuing it at RM15.82 billion, while GenM was unchanged at RM2.36, valuing the casino operator at RM14.01 billion.