Nomura Research has revised down its income and Adjusted EBITDA estimates for Genting Singapore in FY2021 and beyond after the Resorts World Sentosa (RWS) operator this week published subdued financial results for the September quarter.
As reported by Inside Asian Gaming, revenue at RWS fell 16% year-on-year and 9% quarter-on-quarter to SG$251.5 million (US$186.8 million) in 3Q21, with Adjusted EBITDA down 31% on both an annual and quarterly basis due to capacity restrictions still in place across the property.
The company also warned that the recent opening of Singapore’s borders to visitors from some countries was unlikely to move the needle significantly due to those designated for quarantine-free travel being non-traditional source markets.
In a Wednesday note, Nomura analysts Tushar Mohata and Alpa Aggarwal said it has cut Genting Singapore’s revenue estimates by 9% to SG$1.10 billion, Adjusted EBITDA estimates by 8% to SG$490 million and income estimates by 16% to SG$182 million. Estimates for 2022 and 2023 have also been revised down, albeit to a lesser extent, with revenue tipped to reach SG$2.06 billion in 2023, Adjusted EBITDA SG$901 million and income SG$490 million.
The analysts noted that the return of Chinese nationals “still seems to be some time away, with China still pursuing a zero-COVID strategy, and this will likely continue to impact Genting Singapore’s FY22F revenues, given China was the most important overseas market before the pandemic.”
However, “While earnings in the near-term are unlikely to surprise on the upside, we reiterate our positive stance on Genting Singapore to play the trend of gradual border reopening for Singapore to overseas visitors.”
A “BUY” rating remains in place for Genting Singapore stock.
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