Genting Malaysia posts RM1.5 billion net loss

PETALING JAYA: Genting Bhd swung into a net loss of RM1.49 billion for the third quarter ended Sept 30, 2018, on a RM1.83 billion impairment loss on the group’s investment in the promissory notes issued by the Mashpee Wampanoag Tribe (Tribe).

The impairment loss was due to the uncertainty of recovery in the group’s investment following the US Federal Government’s decision concluding that the Tribe did not satisfy the conditions under the Reorganisation Act that allows the Tribe to have the land in trust for an integrated gaming resort development.

However, the group continues to work closely with the Tribe on options that include a legislation being introduced in US Congress which, if passed, will entail the US Federal Government to reaffirm the land in trust for the benefit of the Tribe.

The impairment loss can be reversed when the promissory notes are assessed to be recoverable.

For the corresponding quarter in the preceding year, the group made a net profit of RM193.77 million.

Revenue was up 14.51% to RM2.6 billion, compared with RM 2.27 billion with higher volume of business in the mass market segment following the opening of new facilities and attractions under the Genting Integrated Tourism Plan, which have been well received.

In a separate statement, the group said it is cautious on the opportunities and of the leisure and hospitality industry amid the uncertain consumer spending environment.

In Malaysia, the announcement of a revision in casino duties and casino license fees in Budget 2019 will impact the group’s earnings next year.

The group is reviewing its marketing strategies and will streamline its operations and cost structure to mitigate the impact of the tax increases.

In the meantime, the group remains focused on the progressive roll out of the new Skytropolis Funland indoor theme park this year.

In the UK, the group said it is committed to improving overall business efficiency and growing its in this segment.

While in the US, the group will continue intensifying its direct marketing efforts to increase visitation and frequency of play at the property.

Genting Malaysia’s performance in the third quarter pushed the group into net losses for the cumulative nine-month period ended Sept 30, 2018 of RM739.73 million, compared with a net profit of RM711.51 million for the corresponding period in the preceding year.

Revenue for the period was 9.35% higher at RM7.42 billion, compared with RM679 billion.

Source: The Sun Daily

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