Genting Malaysia reopening delayed until vaccination target met

by Charlotte Lee Last Updated
Fitch provides outlook on Genting’s portfolio

The much anticipated reopening of Malaysia’s premier casino, Genting Highlands resort, has been postponed.

Inside Asian Gaming reports that a proposed domestic tourism bubble that was to see Genting Malaysia’s Genting Highlands resort reopen this week has been put off.

The delay follows intervention from Malaysian Prime Minister Datuk Seri Ismail Sabri Yaakob, who declared that tourism destinations would only be allowed to reopen once 90 per cent of the country’s adult population is fully vaccinated.

Based on the current vaccination rate of 84 per cent and figures showing around 150,000 people are receiving their second dose each day, such a target is likely to be met in around two weeks’ time.

Malaysia’s Ministry of Tourism, Arts and Culture named Genting Highlands, home of Resorts World Genting, as one of three tourism destinations it was looking to reopen by 1 October as part of a domestic tourism bubble.

RWG has been closed since June 1 under Malaysia’s nationwide lockdown, however the company recently revealed that around 95 per cent of its Malaysian staff had been vaccinated as of late August.

In the three months to 30 June 2021, Genting Malaysia reported a net loss of US$87.4 million, due to ongoing global COVID closures.

As a result of the imminent reopening, analysts have reiterated their “buy” resting on Genting Malaysia stocks, due to their expected turnaround in the fourth quarter, with the new Skyworlds theme park also expected to launch during that quarter. 

Fitch expects Malaysian bounceback quicker than neighbours

Fitch Ratings analysts have predicted that gaming markets more reliant on local visitation will continue to recover faster from the impacts of the coronavirus pandemic and be able to weather the effects of on-off closures due to local infections.

Fitch Ratings said it maintained a negative outlook for a majority of its “rated gaming universe” because of the pandemic’s severe impact to casino operators and uncertainty regarding the sector’s recovery trajectory.

Discussing jurisdictions in the Asia-Pacific, Fitch noted that for the Macau casino market, although the city had an almost universal quarantine-free travel bubble with mainland China, current continued travel restrictions between Hong Kong and Macau were a “headwind”.

The institution said it was forecasting monthly revenue declines of 50 per cent to 60 per cent, year-on-year, through the first half of 2021, with accelerating growth in the second half, “led primarily by the premium mass segment.”

Fitch Ratings noted: “The eventual easing of travel to Hong Kong and potential availability of a vaccine drives our assumption for a strong second half 2021 performance relative to first half 2021.”

The financial institution observed that while Macau’s current six gaming licences expire in June 2022, the city’s chief executive Ho Iat Seng had a “multi-year extension option” in relation to the current rights.

“Fitch continues to believe the concession rebid process will be pragmatic,” said the credit rating agency, referring to an anticipated new public tender associated with the expiry of the current Macau gaming rights.

Fitch Ratings expects casino revenues in Malaysia, where Genting Malaysia runs the country’s only licensed gaming complex, Resorts World Genting, near the capital Kuala Lumpur, to recover gradually to 75 per cent 2019 levels in 2021, “aided by new attractions”, understood to be a reference to a long-awaited new outdoor theme park and the country’s larger and domestic focused market relative to neighbouring Singapore.

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