Genting suffers bigger losses in Q1 as Covid-19 keeps visitors away

KUALA LUMPUR: Genting Bhd fell deeper into the red in first quarter due to the adverse impact of the Covid-19 pandemic on the group's leisure and hospitality operations.

Net losses in the three-month ended March 31 ballooned to RM331mil from RM132mil a year ago.

Revenue tumbled 45% to RM2.2bil from RM4.1bil previously, the company said in a press release today.

"Genting Malaysia Bhd’s (GENM) leisure and hospitality business worldwide continued to report lower cost structure in 1Q21 following the re-calibration of GENM Group’s operating structure and right-sizing of its workforce in response to the unprecedented disruptions to its operations amid the Covid-19 pandemic," it said.

In Malaysia, the group said imposition of a third Movement Control Order (MCO 3.0) nationwide will continue to adversely impact GENM Group’s business following the temporary closure of Resorts World Genting’s casino operations from May 24.

"While GENM Group continues to work towards the completion of Genting SkyWorlds outdoor theme park in the third quarter of 2021, the opening date of the park is dependent on developments surrounding the Covid-19 situation and its impact to the leisure and hospitality sector in the country," it said.

In the UK, GENM Group’s land-based casinos have reopened since May 17, while in the US preparations are in place for the opening of the new 400- room Hyatt Regency JFK at Resorts World New York hotel from the middle of 2021.

The group said that while Resorts World Sentosa has resumed business, it expects international visitor arrivals to Singapore, especially for leisure purposes will be unlikely to return in the near term.

"The outlook for the tourism, leisure, and hospitality industries remain highly uncertain as recovery setbacks persist amid ongoing travel restrictions in response to the pandemic. Consequently, the regional gaming market will continue to face significant challenges in the short-term," Genting said.

Meanwhile, the group's palm oil business under Genting Plantations Bhd's (GENP) prospects for the rest of the year will track the performance of its mainstay plantation segment, which is in turn dependent principally on the movements in palm products prices and GENP Group’s fresh fruit bunches (FFB) production.

"Notwithstanding lacklustre production in the first quarter of 2021, GENP Group expects a recovery in crop output and overall growth in FFB production for the year underpinned by additional mature areas and favourable age profile of its Indonesia operations," it said.

For the Property segment, GENP Group will continue to offer products which cater to a broader market segment given the prevailing soft market sentiments.

"Meanwhile, patronage and sales of the Premium Outlets® will continue to be adversely affected until the Covid-19 situation has eased," it said.

On the energy division, Genting said that the Banten power plant in Indonesia has resumed to normalcy with 100% availability subsequent to the minor outage which was carried out from end December 2020 to early February 2021.

In Gujarat, India, the performance of the Jangi wind farm will improve with the higher wind season from June to August.

"The progress of the copper cap installation that will mitigate the probability of lightning strikes is slower than expected due to the sudden surge of Covid- 19 cases in India. However, full completion by 2021 is still envisaged," it said.

The group's oil and gas business is expected to perform better this year.

"With the steady production year on year, coupled with the improvement in global crude oil price and hedging of oil prices, Chengdaoxi block will continue to make positive contributions to the Group," it said.

Genting has also rescheduled the completion of front end engineering design at in Kasuri development block in Indonesia.

Following the approval from the Ministry of Energy and Mineral Resources of Indonesia on the Plan of Development for the Kasuri block, work on the front end engineering.

"Utilising 1.7 trillion cubic feet of discovered gas-in-place, the plan to supply natural gas until the end of the production sharing contract to a petrochemical plant in West Papua is in progress, and which is to be built by a third party," it said.