Genting Singapore Shutters Japanese Subsidiaries Following Yokohama IR Exit
Posted on: December 29, 2021, 07:30h.
Last updated on: December 29, 2021, 10:34h.
Genting Singapore was once a possible candidate for an integrated resort (IR) in Yokohama, Japan. When the city scrapped those plans, the casino operator was put in a tough spot. Now, it’s shutting down some of its Japanese operations as a result.
![Resorts World Sentosa](https://www.casino.org/news/wp-content/uploads/2021/12/Resorts-World-Sentosa.jpg)
Genting’s name repeatedly surfaced as a strong candidate to be the host of Yokohama’s IR. That was before Takeharu Yamanaka was elected the city’s mayor in August. While the former mayor, Fumiko Hayashi, was behind the IR project, Yamanaka wasn’t. Once he was sworn in, one of his first actions was to withdraw from the IR race.
This left Genting in a difficult situation. It has a number of operations established in the country, most of which would have supported the IR. In an announcement from yesterday, the company said that it will shut down eight of its subsidiaries in Japan. Initiatives to dissolve and liquidate the companies have already begun.
One of the eight is Genting International Japan Co Ltd, a wholly-owned subsidiary headquartered in Tokyo. The rest of the group includes operations in Yokohama and Osaka, and other locations. They were created to direct investment holdings and leisure and hospitality services for Genting in Japan.
The dissolution of the operations isn’t expected to affect Genting’s overall net tangible assets for 2021, according to the announcement. The changes shouldn’t impact earnings per share for stockholders this year, either.
Genting Sees Mixed Results in 2021
While its involuntary exit from Japan was a disappointment, Genting is still getting support from analysts for its growth potential. Hong Leong Investment Bank Bhd maintains its ‘Buy’ rating on Genting Group, Genting’s parent company.
Analyst Tan Kai Shuen wrote in an update last week that Genting would benefit from improved gaming, leisure, and hospitality segments from Genting Singapore, Genting Malaysia Bhd (GenM), and Resorts World Las Vegas (RWLV).
Tan explained, “GenM witnessed a strong return of local visitors to Resorts World Genting (RWG) since Malaysia lifted the interstate travel ban on October 11, while Singapore is progressively easing its border restrictions, which will bode well for [Genting Singapore], as it relies heavily on international visitors.”
Genting, he said, provides exposure to RWLV, which has strong growth potential over the long term and can positively impact its financial health.
RWLV reported revenue of US$175million and EBITDA (earnings before interest, taxes, depreciation and amortization) of US$27million for its 3Q21 full-quarter results. Although Las Vegas Strip gaming revenue fell 21.2% in August on a month-over-month basis, it gained some ground in September, October, and November.
Prospects for GenM are optimistic, with the growing number of people returning home to RWG and the positive contributions from the UK and US divisions.
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