By NUR HAZIQAH A MALEK / Pic source gentingmalaysia.com
GENTING Bhd’s net profit for its fourth quarter ended Dec 31, 2020 (4Q20), fell 95.28% year- on-year (YoY) to RM24.98 million versus RM528.82 million in 4Q19 due to the impact of the Covid-19 pandemic.
Revenue declined to RM3.05 billion from RM5.3 billion, led by the fall in the company’s leisure and hospitality division.
In a filing to Bursa Malaysia yesterday, the company noted that the decline in revenue from its leisure and hospitality arm, Resorts World Genting (RWG), was due to lower business volume from both gaming and non-gaming segments following the travel restrictions imposed during the Conditional Movement Control Order in most states from Oct 14, 2020.
“Additionally, RWG continues to operate with reduced capacity and stringent health and safety protocols in accordance with guidelines from the authorities. “However, a higher hold percentage was recorded from the mid to premium players segment in the current quarter,” it said in its exchange filing.
Consequently, lower Ebitda was also recorded, partially mitigated by lower operating expenses and reduction in payroll and related costs as a result of lower headcount.
Overall, Genting Malaysia Bhd’s (GenM) leisure and hospitality business worldwide posted lower cost structure in the quarter following its operating structure recalibration and workforce right-sizing.
The group’s leisure and hospitality business in the UK and Egypt also recorded lower revenue on lower business volume as GenM’s land-based casinos in the UK operated with reduced capacity since mid-August 2020.
“These venues were periodically closed throughout that period in compliance with the governments’ directive to curb the spread of Covid-19.
“Arising from the lower revenue and higher debts provision which were partially mitigated by lower payroll costs, an adjusted Lbitda was recorded,” it said.
Genting’s business in the US also recorded lower revenue on lower capacity following business recommencement from Sept 9, 2020.
Since reopening, Resorts World Casino New York City’s gross gaming revenue had been the same as that for the previous year’s corre- sponding quarter up until the property limited its operating hours from mid-November 2020 in compliance with the US government mandate, it said.
Meanwhile, the group posted growth in its plantation division on higher palm products prices.
“Fresh fruit bunch (FFB) production also increased in the current quarter, supported by production growth from Indonesia on the back of a better age profile, which outweighed the fall in out- put from Malaysian estates.
“However, adjusted Ebitda for downstream manufacturing declined, mainly due to lower sales volume and capacity utilisation, coupled with lower margins,” it said.
Its Banten Power plant in Indonesia commenced its scheduled minor outage on Dec 19, 2020, which took 45 days to complete, and thus, resulted in lower net generation and decline in revenue versus the previous year’s quarter.
For the full year, Genting posted a net loss of RM1.02 billion for FY20 versus a net profit of RM2 billion in FY19.
The group recorded 47% lower revenue YoY of RM11.56 billion led by fall in the leisure and hospitality division, while the plantaton division posted an increase in revenue.
Moving forward, the group perceives the global economic conditions to continue recovering on progressive mass vaccination rollout.
“Ongoing concerns and uncertainties amid the fluidity of the Covid-19 situation worldwide remain a significant downside risk. In Malaysia, near-term growth will be impacted by existing containment measures implemented to curb the spread of the virus,” Genting noted in its filing.
It added that the local economy is projected to gradually improve in the longer term, while the outlook remains highly uncertain for global tourism.
“While the regional gaming market has continued to register some level of recovery, significant challenges will persist in the coming year given the negative impact of the pandemic on the sector.
“Genting group maintains its cautious stance on the near-term prospects of the leisure and hospitality industry,” it said.
Genting announced a special dividend of 8.5 sen a share, payable on April 8, 2021.