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The recent evaluation of Malaysia's tourism and gambling giant, Genting Malaysia Berhad (GENM), indicates a "stable" outlook.
While the parent company, Genting Berhad, is experiencing slow revenue recovery and Empire Resorts Inc. has weak financial conditions, GENM's revenue recovery is relatively slow but stable. This stability is attributed to its diversified cash flow.
According to reports from Genting Berhad, despite a 28% decline in adjusted EBITDA, first-half revenue increased by 14% to $2.47 billion ($531 million) and a profit of $447.9 million ($96.43 million). In the second quarter, total losses for partners like Resorts World Catskills, a subsidiary of Genting Empire Resorts Inc., reached MYR 30.1 million ($6.4 million) due to increased labor and operating costs.
In the first half of 2022 and 2023, more than 60% of GENM's revenue comes from Malaysia, which is below expectations due to heavy rainfall and landslides at the end of 2022. Fitch revised its revenue forecast for 2023 and 2024 to about 90-95% of 2019 levels, lower than the previous estimate of 95-100%. The company expects revenue growth from an increase in domestic and international tourists, supported by channel repairs in the first half of 2024.
GENM is pursuing a casino license in the United States. Genting New York LLC, a subsidiary of GENM (GENNY), has been assigned a "BBB-" long-term issuer default rating and faces competition for a comprehensive gambling license. While it requires increased capital investment, obtaining the license would allow GENM to enter a significant market, increase geographical diversity, and potentially reduce GENNY's gross gambling revenue tax. In Miami, Florida, GENM plans to sell land worth about $1 billion for partial financing.
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Post time 30-9-2023 09:42:43