Genting Warns of "Significantly Higher" Losses in First Half of 2020
This week, cruise ship and casino operator Genting Hong Kong warned that its losses for the first half of 2020 will be "significantly higher" than the same period last year, primarily due to the coronavirus outbreak. In 2019, the firm's losses in the first half totaled $55 million.
The COVID-19 pandemic has disrupted the operations of virtually every passenger vessel firm, and Genting is no exception. Its cruise ships World Dream, Genting Dream, SuperStar Gemini, SuperStar Aquarius and Star Pisces all halted operations beginning in January and February, and Genting only restarted service in Taiwan in late July.
The company also owns its own shipbuilding operation, German shipyard conglomerate MV Werften, which was also forced to suspend operations due to the pandemic. Two vessels under construction - the Global Dream and Crystal Endeavour - will be delayed by a year due to the shutdown.
Genting's casino and nightclub businesses in Manila and Singapore have also suffered. Last week, Manila doubled down on its coronavirus prevention measures with a return to lockdown, and Genting's Resorts World Manila development will have to remain closed for the near future.
In response to the financial pressure, Genting has announced an executive pay cut, a series of layoffs and furloughs, salary cuts, capex cutbacks, a debt deferral agreement and a layup program for its idled ships.
The line has also experienced several positive developments. Two unused vessels - SuperStar Aquarius and SuperStar Gemini - have been leased to the Singaporean government for use in housing recovered COVID-19 patients. In addition, Genting's Dream Cruises brand is restarting cruise operations for the Taiwanese market, with all-domestic itineraries. The vessel Explorer Dream is the first ship to return to Taiwanese service, and Genting worked with DNV GL to adapt her operating protocols for the COVID-19 era. She is operating at one-third capacity in order to maintain social distancing requirements, and some public areas on board - notably the casino - are closed.
"We believe the development of cruise bubbles between Taiwan and neighboring regions that also have their pandemic situation under control, such as the outlying islands of Japan, can further initiate the next phase in the re-establishment of international tourism, and spur economic recovery for a post Covid-19 world," said Genting Cruise Lines president Kent Zhu in a statement.