Genting M refuses to issue statement on COVID-19 impact

In a rare occurrence, Genting Malaysia Bhd in its latest annual report said it is not prudent at this juncture to issue any statement on the group’s prospects given the unprecedented times of uncertainty due to the COVID-19 pandemic.

Genting Malaysia’s statement was captured in the special section on updates dated April 7, 2020 in Genting Malaysia’s 2019 annual report, which was filed with Bursa Malaysia today.

In the section, which followed Genting Malaysia chairman and chief executive Tan Sri Lim Kok Thay’s statement dated Feb 27, 2020 in the annual report, the group said the paragraphs below supersede in full all the paragraphs in Lim’s Feb 27 statement in relation to the company’s prospects.

“The COVID-19 outbreak has evolved into a global pandemic, adversely affecting economies worldwide due to the widespread imposition of travel restrictions, constraints on the movement of people and the suspension of many business operations to curb the spread of this virus.

“In Malaysia, the group has temporarily suspended operations at RWG (Resorts World Genting), Resorts World Awana, Resorts World Kijal and Resorts World Langkawi since 18 March 2020 in compliance with the Movement Control Order (MCO) announced by the Prime Minister.

“Similarly, as required by the respective authorities, RWNYC (Resorts World Casino New York City), RWC (Resorts World Catskills), RW (Resorts World) Bimini, Resorts World Birmingham and the group’s other land-based casinos in the UK are also temporarily closed to curb the spread of COVID-19.

“These are unprecedented and challenging times for the group. The spread of the COVID-19 and its impact on economies worldwide are major concerns globally and to the group.

“The situation will remain fluid as Governments worldwide adapt to the evolving response to contain the COVID-19 pandemic.

“Given these unprecedented times of uncertainty, it is not prudent at this juncture to issue any statement on the group’s prospects,” Genting Malaysia said.

Genting Malaysia said shareholders should not rely on the prospects in the preceding section which carried Lim’s Feb 27 statement but should instead refer to the two paragraphs under the April 7 updates for the group’s prospects.

In the preceding section, Lim said the expansion of the global economy is expected to modestly improve as market sentiments gradually recover following potentially lower global trade tensions.

However, downside risks are more pronounced due to heightened global concerns over the severity of the impact of the COVID-19 pandemic on the global economy, he said.

“Additionally, concerns over protracted geopolitical tensions and policy uncertainties remain. Domestically, the expansion of the Malaysian economy is expected to continue at a slower pace.

“In terms of tourism, demand for international travel is expected to decline in the near-term following the imposition of travel restrictions and widespread concerns surrounding the COVID-19 outbreak.

“The regional leisure and hospitality industry will be adversely impacted, including the gaming industry. Consequently, the group is more cautious on the near-term prospects of the leisure and hospitality industry.

“In Malaysia, we remain focused on the timely completion of the outdoor theme park as ongoing development works approach its final stages.

“Pre-opening arrangements for the theme park are currently underway as the group prepares to capitalize on the growth in visitation once the domestic and regional tourism sector recovers.

“Meanwhile, the group will continue leveraging its quality assets to grow key business segments and improve overall yield contributions at RWG.

“Additionally, the group will continue to drive operational and cost efficiencies as well as optimize yield management at the resort to better manage the challenging operating environment.

“In terms of our operations abroad, the group remains committed to enhancing operational excellence through the careful implementation of various strategies to reinforce and grow our international presence,” he said.

At Bursa today, Genting Malaysia’s share price closed down seven sen or 3.21% at RM2.11 for a market capitalization of RM11.93 billion. The stock saw some 19 million shares traded.

Malaysia’s MCO, which was initially scheduled between March 18 and 31, requires non-essential businesses to stop operations, while the public has been ordered to stay at home to curb the COVID-19 outbreak.

On March 25, the Government decided to extend the MCO until April 14, because updates from the National Security Council and Health Ministry indicated an increase in COVID-19 cases.