Genting Malaysia posted a 2018Q3 loss after writing off an investment in promissory notes issued by the Mashpee Wampanoag tribe for a casino project in Massachusetts. The net loss was 1.49 billion ringgits (US$358 million), compared with a profit of 194 million ringgits (US$47 million) a year earlier.
Revenue rose 14.5 percent to 2.59 billion ringgits (US$622 million), while its 2018Q3 EBITDA of 775 million ringgits (US$186 million) was at a record high, according to a note from Maybank Kim Eng analyst Samuel Yin Shao Yang.
Genting invested US$426 million in promissory notes from the tribe under an accord to operate a casino. However, the project ran into legal difficulty with the Department of Interior ruling in September that the tribe didn’t satisfy conditions under the Indian Reorganization Act to allow the tribe to have the land in trust for an IR.
The company has operations in the United States, the Bahamas, and the United Kingdom, and the group is also seeking a license for Japan.
Most of the group’s revenue growth came from its Malaysian operations, which saw an increase of 26 percent to 1.7 billion ringgits (US$408 million). The group’s Resorts World Genting, the only legal casino in Malaysia, has been benefiting from increased visitation from the rollout of new attractions under the Genting Integrated Tourism Plan.
However, this week the company said it has filed a lawsuit in the United States against the Walt Disney Company and Fox Entertainment for pulling out of an accord for a 20th Century Fox themed amusement park. It was expected to open next year and was seen as a major crowd puller.
Management declined to comment on the fate of the park given the lawsuit. The company posted a decline in revenue from its US and UK operations.
Parent company, Genting Bhd, said up until the end of 2018Q3, it had spent US$1 billion on its Resorts World Las Vegas property, which is under construction. The resort will have 3000 rooms, and total capex by 2020 is expected to be US$4 billion, Maybank says. (AGB)