Genting Malaysia, which closed its resort facilities in Genting Highlands, Kuala Lumpur, on March 17 could lose RM250 million(US$60 million) for the 14 days of its planned shutdown.
According to Affin Hwang Capital, the decision to close down the mountaintop resort “would help to lower overall operating cost during the shutdown period,” but would not compensate for the “significant” revenue loss.
In a statement, Resorts World Genting said the temporary closure—which was originally set to last through March 31—will include “hotel facilities, food & beverage outlets, casino, Skytropolis Indoor Theme Park, entertainment facilities, attractions, shopping malls and retail outlets.”
The analyst group added, “Given that construction works are also put on hold, we do not discount the possibility that the new outdoor theme park, which was scheduled to open by the third quarter of 2020, could face further delays.”
Conversely, they said, the temporary closures of Resorts World Casino New York and Resorts World Catskill “are not expected to have a material financial impact to the group as a whole, given that its U.S. operations contribute less than 15 percent to the group’s overall earnings.”
In related news, GGRAsia reported that the company will inject US$40 million into U.S.-based Empire Resorts Inc., which operates Resorts World Catskills, by subscribing to its preferred stock. “The proceeds from the equity injection will be utilized by Empire for the purposes of a refinancing plan and working capital,” said Genting Malaysia in a filing to Bursa Malaysia.
Genting Malaysia bought a 49 percent stake in the company in November 2019. It said the equity injection “enables Empire to have funds for the refinancing. The proceeds also provide Empire additional funds for its working capital, if required in view of the recently-announced temporary closure of Resorts World Catskills by the authorities due to the Covid-19 pandemic.”
The company added that operating results at Resorts World Catskills had “continued to improve” prior to the viral outbreak. For the financial year ended 2019, that property registered a 48 percent growth in total gross gaming revenues to US$208.7 million, according to Genting Malaysia’s latest filing.
