Resorts World Genting in Malaysia to reach 95% of pre-COVID revenue levels in 2023: Fitch – IAG
Genting Malaysia is expected to see revenue from its core integrated resort, Resorts World Genting (RWG), return to 95% of pre-COVID-19 levels in 2023, boosted by a strong domestic market recovery following the easing of restrictions. COVID-19 restrictions in April, according to rating agency Fitch.
In a Friday note informing investors that it had upgraded its outlook on Genting Malaysia Berhad’s long-term issuer default ratings (IDRs) from negative to stable, Fitch pointed to the strong recovery in gambling revenue. the company over the past six months, as evidenced by its promising 2Q22 results.
Genting Malaysia saw its revenue more than double to MYR 2.18 billion (USD 487 million) in the June quarter, including a five-fold increase in RWG revenue to MYR 1.31 billion (293 million USD), the upward trend expected to continue in 2023.
“We expect Malaysia’s revenue, which was nearly 70% of the pre-pandemic consolidated total, to recover to more than 75% of 2019 levels in 2022 and around 95% in 2023,” it said. Fitch, noting that 1H22 was only 31% of 2019 levels.
“This follows the lifting of pandemic-related restrictions in April 2022. The recovery should be aided by limited reliance on overseas visitors and additions to the new Genting SkyWorlds theme park by 4Q22. UK and US operations also saw higher revenues in HY22 amid receding pandemic risks and we expect further improvement.
“Non-gaming revenue was 20%-25% of the total over the 2018-20 period and we believe this healthy share will continue.”
As revenues are on the way back, Fitch said it expects Genting Malaysia’s EBITDAR margin to remain strong after quickly surpassing 2019 levels in the second quarter – helped by a 35% reduction of the company’s Malaysian workforce during the pandemic.
“Genting Malaysia does not expect headcount to return to pre-pandemic levels, despite plans to hire additional staff over the next year,” the agency explained. “We believe that improved operational efficiencies and the company’s plan to improve returns will keep its EBITDAR margin above 2019 levels.”