Genting Malaysia, a cyclical recovery winner: RHB Research

KUALA LUMPUR: Genting Malaysia Bhd’s core loss of RM1.26 billion in the year ended December 31 2020 was within expectations, but an 8.5 sen special dividend came as a positive surprise, said RHB Research.

The firm said overall, it was upbeat as Genting Malaysia was able to record positive earnings before interest, taxation, depreciation and amortisation (Ebitda) in FY20 (-87 per cent year-on-year) despite Covid-19’s impact and the closure of certain facilities.

“While the high number of Covid-19 cases worldwide may continue to hamper its recovery, Genting Malaysia is a clear beneficiary of a cyclical recovery – as we head closer to achieving mass vaccination – and should gain traction in the second half of 2021,” RHB Research said in a report.

“We are also positively surprised by the 8.5 sen special dividend, which brings year-to-date dividend to 14.5 sen , above our 11 sen estimate,” it added.

RHB Research said Genting Malaysia’s Ebitda in the fourth quarter was down 45 per cent quarter-on-quarter, mainly dragged by the weak Malaysia operations, which saw lower visitor arrivals to Resorts World Genting.

In its overseas business, the UK segment remained loss-making as the casinos were periodically closed throughout the period, in compliance with UK government directives.

The US segment Ebitda, however, was 8.6 pe rcent higher year-on-year since reopening in September 2020, mainly helped by cost-cutting measures in place.

RHB Research said Genting SkyWorlds outdoor theme park was on track to open by mid-2021.

“The theme park is in final stages of completion, currently undergoing various safety testing over the next few months.”

Genting SkyWorlds is sitting on 26 acres of land, and can accommodate up to 20,000 visitors.

It will have 26 rides and attractions, of which, some will incorporate the 20th Century Studios brand.

Source: NST