PETALING JAYA: The multi-billion ringgit outdoor theme park in Genting Highlands that was scheduled for a soft opening in the third quarter this year, has been postponed again.
Genting Malaysia Bhd’s (GenM) management guided analyst in a briefing last week that the opening of the outdoor theme park was now scheduled for third quarter of 2021.
After several delays and legal suits against Walt Disney Co of the US, the theme park that was mooted in 2014 with a spending of RM5bil, was supposed to have a soft opening in the third quarter of this year.
The soft opening was said to have with 20 rides, including four roller coaster type of attractions, on its 26-acre site.
However, Genting group’s management in its notes accompanying the latest set of results said that development works on the outdoor theme park were affected by the movement control order (MCO).
“As development works on the outdoor theme park were affected by the MCO, the group is working on a revised timeline for the completion and opening of the outdoor theme park, ” it said without going into details.
Some analysts described the delay by more than 12 months as the biggest negative from the management briefing last Friday after the release of Genting group’s first quarter results.
Genting Bhd, which is the parent company of GenM, registered losses of RM132.3mil in the first quarter this year from a profit of RM561.6mil in the corresponding period last year. The results were only to be expected as the group’s casino operations that spans from Malaysia to the UK and US were disrupted due to the Covid-19 pandemic.
Genting provided for RM482.5mil in impairments that mainly came from its 49.3% subsidiary, GenM, which owns and operates the theme park in Genting Highlands, casinos in the UK and some of the gaming outlets in the US and Bahamas. GenM provided for its casinos in the UK and the US, which accentuated its losses.
GenM registered a loss of RM418mil in the first quarter on the back of a 28% drop in revenue that declined to RM1.96bil. Analysts do not expect the company to declare any dividend this year.
GenM’s capital expenditure (capex) also dropped in tandem with the delay in its outdoor theme park.
The capex for this year has been cut to RM300mil from the earlier estimated amount of RM1.2bil. GenM has also stated that it may cut staff to match the reduced number of visitors to its resorts.
Since it was mooted in 2014, the opening of the theme park has gone into several delays. In the initial stages of the planning, the theme park known as the “Genting Integrated Tourist Plan” was slated to open by 2017 or 2018, the latest.
The outdoor theme park was to carry the ‘20th Century Fox’ branding.
However, in November 2018, GenM filed a suit against Walt Disney Co, which took over Fox Entertainment Group and some of the Fox-branded intellectual property assets.
Both parties reached a settlement in July last year whereby the outdoor theme park would have some rides with the properties of the Fox intellectual assets but without the branding.
While GenM has delayed on its opening of the outdoor theme park, Genting has set its sights on opening of its casino in Las Vegas next year and winning the rights for one of the two integrated resorts in Japan.
So far, Genting has forked out US$2.1bil on the casino in Las Vegas that is estimated to cost some US$4.3bil.
The project is expected to have some of the latest attraction for Resorts World Las Vegas to compete as a destination for tourist and conference participants in the highly competitive market there.
Genting is pursuing to build an integrated resort in Yokohama City through its subsidiary Genting Singapore Plc.
The request for proposal is expected to be out in the second half of this year and Genting has one less competitor to deal with following the pull out of the US-based Sands Group.
The group pulled out from the race in Japan as it felt the conditions were not suitable.
It has been reported that among the conditions was that the license was only for 10 years, which some feel may not be sufficient to recover the cost.