Genting Malaysia to return to profitability in 2022, analysts say

Analysts at RHB Investment Bank have predicted the casino operator will return to profitability in 2022.

Malaysia.- Genting Malaysia could return to profitability in 2022 according to analysts at RHB Investment Bank, despite the ongoing Covid-19 pandemic and the new Omicron variant.

In the report, analysts stated: “Many countries are now better equipped and nimble in handling the pandemic. 

“Coupled with the massive cost rationalisation efforts undertaken previously by the casino operators, these should partially cushion the impact. Both the casino operators will resume recovering after the Covid-19 situation stabilises.”

Asia Gaming Brief also revealed the investment bank maintained its “overweight” rating on the Malaysian gaming industry, with Genting being its top choice.

Analysts stated that this is “due to its attractive 6.2x EV/EBITDA vs the regional peer average of c.13x, which provides investors a cheaper alternative to position for the tourism recovery play angle.”

Analysts at RHB Investment Bank also said that Genting Las Vegas Resort’s contribution is stronger than expected and may bring further growth. The resort is in the early stages of expanding its business.

Last November, the casino operator reported that revenue for the third quarter was down 42 per cent year-on-year to MYR826.3m ($194.8m).

However, analysts at Nomura say earnings for the next quarter will improve, due to the opening of Genting SkyWorlds, new attractions and gradual international border reopening for Malaysia. 

The park, which is expected to lead to higher visitor arrivals to the IR, could be allowed to open its doors fully at the beginning of next month in time to capture pent-up demand in the run-up to the year-end holidays.