International success helps Genting Malaysia halve losses in 2021

| By Daniel O'Boyle
Global operator Genting Malaysia’s revenue was down by 8.2% to MYR4.16bn (£739.7m/€885.3m/$989.6bn) as its flagship Resorts World Malaysia property was closed for much of the year, but lower costs meant the business halved its losses.

Leisure and hospitality – including gaming – made up the vast majority of Genting Malaysia’s revenue, at MYR3.91bn, though this was 10.9% less than in 2020.

Breaking this leisure and hospitality revenue down further, MYR1.52bn was from Malaysia, where Genting operates Resorts World Malaysia, a 51.6% decline. The resort had been closed for around five months in 2021 because of the Covid-19 pandemic, and was impacted by a ban on international tourist travel to Malaysia.

The US and the Bahamas – where it operates Resorts World Casino New York City, Resorts World Catskills and Resorts World Bimini – brought in MYR1.32bn, which was 118.8% more than the year prior, thanks to only minimal pandemic-related restrictions being in place.

In the UK and Egypt, combined revenue was MYR1.06bn, which was up 63.3%. In the UK, Genting operates a number of properties across the country while in Egypt it operates Crockfords Cairo within the Ritz-Carlton hotel. While Genting’s UK venues still faced closures in 2021, these were shorter than those in 2020.

In addition to this leisure and hospitality revenue, Genting Malaysia made MYR180.1m from property, up 139.8%, and MYR71.3m in investment revenue, up 11.8%, resulting in overall revenue of MYR4.16bn, down by 8.2%.

The business then paid costs of sales of MYR4.00bn. This was 15.4% less than it paid in 2020, due in part to a lower headcount, meaning that despite the lower revenue the business made a gross profit of MYR155.4m compared to a loss the year before.

In addition, Geting Malaysia’s other income rose rapidly, to MYR524.0m, almost triple 2020’s total.

Its other expenses, meanwhile, dipped very slightly to MYR1.01bn.

As a result, the business made a MYR341.6m loss before impairment costs, which was 63.3% less than the loss it made the year before.

After MYR240.5m in impairment losses – down from MYR590.5m the year before – Genting Malaysia was left with an operating loss of MYR582.1m, cutting its loss by 61.8%.

Finance costs came to MYR381.8m, up 16.7%, while the business made a further MYR183.8m loss from businesses in which it held noncontrolling stakes.

As a result, Genting Malaysia’s loss before tax came to MYR1.15bn, but this was only slightly more than half the amount it lost in 2020.

After a MYR96.6m tax benefit, Genting Malaysia made a loss of MYR1.05bn. This was 55.5% less than it lost in 2020.

Looking ahead, the group said that it had optimism about global tourism rebounding, but that the virus and the potential for new variants remained a concern.

“While the outlook for international tourism is gradually improving, uncertainties surrounding Covid-19 developments will continue to pose headwinds to global travel,” it said. “Nevertheless, higher vaccination rates worldwide and the introduction of vaccine passports in certain countries will support the recovery of the tourism, leisure and hospitality industries, including the regional gaming sector.

“Against this backdrop, the Group remains cautiously optimistic on the near-term prospects of the leisure and hospitality industry but is wary of the increased spread of COVID-19 variants.”

Last week, Resorts World Sentosa operator Genting Singapore – also part of the Genting Group – reported its own results. Its revenue remained roughly level year-on-year at S$1.07bn (£583.1m/€699.0m/US$794.0m), but lower costs meant that the operator’s profit grew by 164.9%.