RHB Research: Cyclical recovery will benefit Genting

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

Overall, the firm said it said Genting Malaysia could record positive earnings before interest, taxation, depreciation and amortisation (Ebitda) in financial year 2020 (-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 beneficiary of a cyclical recovery — as we head closer to achieving mass vaccination — and should gain traction in the second half of this year,” RHB Research said in a report.

“We are positively surprised by the 8.5 sen special dividend, which brings the 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 down by the weak Malaysian operations, which saw lower visitor arrivals to Resorts World Genting.

In its overseas business, the United Kingdom segment remained loss-making as the casinos there were periodically closed in compliance with government directives.

Its United States segment’s Ebitda was 8.6 per cent higher year-onyear since reopening in September, mainly helped by cost-cutting measures in place.

RHB Research said the Genting SkyWorlds outdoor theme park was on track to open by the middle of 2021.

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

Genting SkyWorlds is sitting on a 10.5ha plot of land and can accommodate up to 20,000 visitors.

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

RHB RESEARCH