Outlook brightens from H2, Fitch says

Resorts World Genting
Resorts World Genting

Jurisdictions benefiting from local support will continue to outperform in the first half of next year, with destination markets such as Singapore, Macau and Las Vegas, likely to begin a faster pace of recovery in the second half once vaccines become more widely available, Fitch Ratings said.

In its 2021 outlook for global gaming, Fitch points out that next year is likely to continue to be affected by targeted measures, such as temporary closures and operating restrictions.

However, it doesn’t expect the impact to be as severe as it has been in 2020.

As a result of local support, Fitch says it prefers Malaysia’s prospects over Singapore. It sees the former recovering to 75 percent of its 2019 levels over the course of next year, helped by new attractions at Resorts World Genting resort.

The company has been rolling out new facilities under the Genting Integrated Tourism Plan, including the completion of an outdoor theme park scheduled for mid-2021.

It says Singapore will be slower to recover as long as the borders remain closed and at present there is no short-term visibility on easing. It forecasts Singapore will only reach 45 percent of 2019 gaming levels next year.

It’s a particularly downbeat forecast and one which may seem at odds with the most recent outperformance at Singapore’s two integrated resorts, which beat expectations in Q3. 

The surprise result was due to pent up demand from locals, however, analysts have said they are not sure how sustainable the business will be going forward. 

As for the online segment, Fitch says it expects outsize growth will continue next year. 

“The pandemic has impacted the global gaming segments differently, with digital and lottery displaying resiliency while destination markets take longer to recover,” said Fitch Senior Director Alex Bumazhny. “Recent vaccine developments are encouraging and underpin our assumption of accelerated recovery in 2H21 in these markets including Las Vegas, Singapore and Macau.”

Macau is likely to continue to suffer from frictions in processing China visas, at least in the first half, Fitch says. Its projections are for only a marginal improvement from current levels in H1, with monthly revenue seen down by about 50-60 percent compared with 2019 levels. 

“The eventual easing of travel to Hong Kong and potential availability of a vaccine drives our assumption for a stronger 2H21 performance relative to 1H21,” it said.



Related Articles

Genting permanently closes U.K.’s Southport casino

Genting Malaysia's U.K. unit has permanently closed its casino in Southport in Northwest England, with 38 staff facing redundancy. The group has already closed casinos in Margate, Torquay and Bristol and has reduced its workforce in London, Glasgow, Edinburgh, Blackpool and Birmingham.

RWG says canteen workers test positive for Covid-19

Genting Malaysia said several canteen workers at its Resorts World Genting resort had tested positive for Covid-19 during regular health screening in early January. The canteens are not accessible to the public.

Analysts upbeat on Malaysian gaming sector

Analysts have turned more upbeat about the prospects for Malaysia’s gambling operators, despite a recent upswing in new Covid-19 cases, saying the sector is good value as stocks are still down between 15 to 26 percent on the prior year. 

Malaysia’s casinos to rebound faster than number operators: Kenanga

Kenanga Research expects Malaysia's casino operator to rebound more swiftly than its number forecast operators, as border restrictions ease. The sector valuation remains attractive as gaming stocks were still 15-26 percent cheaper than a year ago.

Resorts World Genting open, not affected by nearby restrictions

Resorts World Genting says it remains open and is not part of a nearby area that is subject to an Enhanced Movement Control Order.

Genting Malaysia stock hits nine-month high

Shares in Genting Malaysia rose nearly 5 percent on Monday, hitting their highest level in nine months, on expectations the government's easing of restrictions on interstate travel will benefit the casino operator.

Easing of travel restrictions to boost Genting Malaysia

The Malaysian government's easing of travel restrictions to allow inter-state travel from Dec. 7th should provide a boost to visitation to Genting Malaysia, UOB Kay Hian Malaysia Research says.
Resorts World Genting

Local VIPs buoy Genting’s Malaysia operations

Behind the sea of red in Genting Malaysia’s Q3 results, analysts found reason for cheer in the performance of its domestic operations, which generated a positive EBITDA of RM541 million ($133 million) in the quarter.

Genting Malaysia losses at US$182 million in Q3

Genting Malaysia recorded total revenues of over RM1.4 billion (US$354 million) in the third quarter of 2020, representing a 46 percent decline year-on-year. The group registered a net loss of RM726 million (US$182 million).

Genting Malaysia confirms worker positive for Covid-19

Genting Malaysia's Resorts World Genting said one of its security workers has tested positive for Covid-19 during routine health screening protocols. The company said the worker is receiving treatment at a government hospital and did not interact with guests.