PETALING JAYA: The one-month closure of Genting Singapore Ltd’s casino resort starting today is another hit to its parent company Genting Bhd.
The closure comes on the heels of temporary closure of Genting group’s other operations in Malaysia, the United States and the United Kingdom.
TA Research estimates that Genting, which owns 52.8% of Genting Singapore could see its financial year 2020 (FY20) earnings decline by close to 15% after consolidating the latter’s potential fall in earnings.
“In our forecast, we estimate the potential loss of revenue amounting to S$202mil (RM613.14mil) per month to Genting Singapore. This would translate to 23.6% reduction in Genting Singapore’ earnings for FY20 if without any massive cost reductions, ” it said in a report yesterday.
The research firm said consolidating these to Genting’s earnings, “we would see its FY20 earnings to decline 14.9%”.
Last month, Genting Singapore issued a profit guidance that its first half FY20 results would be adversely impacted by the Covid-19 outbreak, after it experienced a significant decrease in visitors across its facilities following the outbreak.
However, on Friday the Singapore government beefed up its efforts to contain further the spread of Covid-19 that include closure of most workplaces, except for essential services and key economic sectors for a month, effective April 7.
Genting Singapore said the closure included its gaming venue, Universal Studios Singapore, the S.E.A. Aquarium, the Adventure Cove Waterpark and Dolphin Island.
Assuming the decline in gaming volume were to exacerbate to 50% (from 5% contraction previously) this year, after taking into consideration IMF’s warning that the world economy could go into a recession, TA said it has cut Genting Singapore’ FY20-FY21 earnings by 43.4% and 2.1% respectively.
Shares of Genting Bhd closed 13 sen higher to RM3.90, while Genting Malaysia was up 5 sen to RM2.08.
Across the causeway, Genting Singapore ended 4 sen more to S$0.69.
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