Genting Hong Kong reveals US$1.72 billion loss in 2020 but confident of lender support

Asian-based cruise ship operator Genting Hong Kong says it remains confident its lenders will support a restructuring of its outstanding debts, despite suffering a massive US$1.72 billion loss for the year ended 31 December 2020.

The Hong Kong-listed firm, which is also a joint venture partner in Philippines IR Resorts World Manila, announced in August that it was temporarily suspending all payments to the group’s financial creditors in order to preserve liquidity as the COVID-19 pandemic grounded its global cruise ship fleet.

The full depth of its woes were laid bare this week with Genting Hong Kong revealing a FY20 loss of US$1.72 billion, widened from a loss of US$158.6 million in 2019 on a 76.5% year-on-year decline in revenue to US$366.8 million. The 2020 results included an Adjusted EBITDA loss of US$385.8 million compared to positive EBITDA of US$142.5 million in 2019.

Providing an update on its net debt position of US$3.14 billion as at 31 December 2020, Genting Hong Kong said it has been in discussions with its key financial partners since last August and described their response as supportive.

“Given the significant progress on the holistic proposal and the fact that relevant lenders are looking to secure credit committee approval on that proposal, the Group has a reasonable [grounds] to believe that a restructuring can be successfully consummated,” it said.

However, the company also warned that it expected COVID-induced difficulties to impact the group’s business for some time to come, adding, “Given the ongoing uncertainty, it may take a longer time for the Group’s overall performance to return to pre-COVID-19 levels, and the new normal in the global travel business landscape will derail the previously projected performance. The Group will continue to adapt its deployment plans as we navigate our business cautiously through a highly fluid environment in 2021.”

Genting Hong Kong’s 2020 losses included a share of loss of joint ventures and associates of US$55.0 million, mainly attributable to losses incurred by Resorts World Manila operator Travellers International Hotel Group, Inc.

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