SINGAPORE – Genting Singapore suffered its worst-ever quarter since its opening in 2010, as pandemic-induced disruptions to the global travel and tourism industry, coupled with a shutdown of nearly three months, dragged the Singapore-listed casino operator into the red in the second quarter.
The group closed the quarter with a net loss of $163.3 million – the worst quarterly performance since the integrated resort's opening.
It was a sharp reversal from the net profit of $168.4 million in the same period a year ago.
"With tourism being the main driver of the group's business, our operations and financial performance have been severely impacted. At the onset of the pandemic, visitor arrivals dropped very significantly from February 2020," Genting Singapore said in its quarterly business review released on Thursday (Aug 6) evening after market close.
Due to the circuit breaker, Resorts World Sentosa suspended all offerings including Universal Studios Singapore, SEA Aquarium, Adventure Cove Waterpark and Dolphin Island, hotels and the casino from April 6 to June 30.
"Despite the swift implementation of a series of cost containment measures including payroll rationalisation and other productivity initiatives, the impact of suffering almost zero revenue during the temporary closure period in the second quarter 2020 was devastating," the group added.
"For the rest of the year, the group remains pessimistic on the overall financial performance as global travel remains highly restrictive," it added.
China, Indonesia and Malaysia account for a big majority of RWS' international gamblers, and this segment will take time to recover, Maybank Kim Eng analyst Samuel Yin said.
Indonesians are not likely to return to Singapore's casinos anytime soon, as the pandemic is worsening, and there is uncertainty over the Chinese returning soon despite "green lanes" or essential travel between Singapore and six provinces in China being allowed since June 8, he added.
The only green shoot appears to be Malaysian gamblers who are likely to return soon after Singapore and Malaysia announced they will open up cross-border travel for essential business and official purposes through a reciprocal green lane starting on Aug 17, Mr Yin said.
Mass leisure travel could take longer to resume, as Singapore began phase two of its reopening only on June 19. This segment's recovery also depends on how well the pandemic is contained in other countries, said RHB analyst Juliana Cai.
"We had previously expected a strong recovery in tourism in 2021 on the assumption the pandemic is under control. But some countries are experiencing a second wave of Covid-19 cases after economic activity resumed, while others are still battling the first wave. So it could be a long road ahead for tourism recovery," she said.
Genting Singapore's revenue for the three months to June 30 plunged 94 per cent to $41.3 million from $636.8 million a year ago, as fallout from the pandemic devastated both its gaming and non-gaming revenues.
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