Genting Malaysia Revenue Predictions Slashed after Delay in Theme Park

Genting MalaysiaThe market analysts have curtailed the revenue predictions for the casino operator “Genting Malaysia” after it announced an inordinate delay in the opening of its most awaited theme park that is being developed at Resorts World Genting in Malaysia.

The 20th Century Fox World Malaysia which is a Hollywood themed amusement facility would be made available to the public in the second half of 2018 instead of 2nd quarter as officially announced earlier.

Affin Hwang Investment Bank Bhd which is a brokerage firm said that the revenue of the company is likely to be affected because of the delay in opening the theme park. As a result of which the revenue projection of the group has been curtailed for 2018 and 2019.

The analysts hope that the casino would be able to make a strong topline growth on the back of the host of new facilities that have been opened in the past as a part of the primary upgrade project. Some of the different amenities include high-speed cable car system, shopping and dining areas as well as state of the art mass gaming area.

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Ng Chi Hoong who is an analyst with Affin Hwang made the following statement:

New facilities have the ability to drive higher visitation growth. This is well-reflected post the opening of the Genting Premium Outlet in second quarter 2017, whereby visitation growth [that quarter] is up 8 percent year-on-year, relative to the 3 percent decline in first quarter 2017.

Genting Premium Outlet is a shopping amenity situated at Resorts World Genting, and it features exclusive retail brands. Nomura who is a Japanese brokerage company similarly mentioned that the new amenities are having a positive effect with an increase of 7% in revenue on the quarter-on-quarter basis for Malaysian unit.

Analysts have predicted a revenue upswing when a new VIP area is opened for public use in September. Also, a hotel will be ready for use by the end of this year that will comprise 500 rooms. However, the analysts have raised their concern that the operating costs especially payrolls and utilities were causing harm to profitability with the unit’s adjusted EBITDA (earnings before interest, taxation, depreciation, and amortisation) going down by 5% to approximately 30%.

There is a 60% decline in net profit for Genting Malaysia on year to year basis in the 2nd quarter of 2017. Under RM10 billion Genting Integrated Tourism Plan or GTIP,  a major makeover of the facilities is being carried out. It seeks to expand and overhaul the amenities and facilities of the casino in a significant way over one decade. Genting Malaysia also runs Resorts World BiminiBahamas and Resorts World Casino New York City.

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