Empire Resorts must secure financing at attractive rates soon if it is to turn profitable and avoid the need for a further capital injection from Genting, Nomura said in a research note.
The firm said it has built in associate losses of MYR238 million into its forecasts for Genting Malaysia this year due to its share of losses from Empire. The Malaysian company was forced to inject a further $20 million into the U.S. company on Friday.
Despite the Empire losses, Nomura said it retains its buy on Genting Malaysia.
“We believe investors will overlook near-term bumpy earnings, and are looking through to FY22F prospects, which look promising for Malaysia with the Skyworlds theme park scheduled to open (official guidance: mid-2021), vaccines expected to be widely available by end-2021 in Malaysia, the UK and the US (key markets), and start of some inbound tourism.”
The world is bouncing back, or at least coming to grips with the fact that going forward not much will be the same as before. Commendably, this industry quickly understood the need to adapt to a new normal, and that the days of targeting the low hanging fruit of the VIP sector are gone.
Over the years, many of the answers have been remarkably prescient in their forecasts for the near-term direction of Asia’s gaming industry. However, we can safely say that no one came anywhere close to guessing what 2020 may have had in store.