Analysts expect significant growth for Resorts World Sentosa

Genting Singapore posted a net profit of US$205.6m for H1.
Genting Singapore posted a net profit of US$205.6m for H1.

Growth is expected across all three gaming segments, driven by improving Chinese visitor arrivals.

Singapore.- Resorts World Sentosa (RWS), operated by Genting Singapore, is anticipated to show year-on-year growth across all three gaming segments for the full year of 2023, according to banking group Nomura. Analysts Tushar Mohata and Alpa Aggarwal estimate that rolling chip volume, mass table drop, and slot handle will increase by 51, 30 and 21 per cent, respectively.

This outlook is based on the expected gradual improvement in overseas visitor arrivals from China. According to Nomura, the number of mainland Chinese tourists visiting Singapore in July and August reached 81 per cent and 76 per cent of pre-pandemic levels in 2019. This is based on Singapore Tourism Board data and Nomura’s research.

Analysts said the overall volume of tourists visiting Singapore in September was only 50 per cent of the 2019 average. However, they noted that this was consistent with other regions. They expect that the number of Chinese tourists visiting Singapore will improve in the fourth quarter.

Analysts noted that Resorts World Sentosa’s market rival, Marina Bay Sands, has reported a 13.7 per cent sequential increase in adjusted property EBITDA, reaching US$491m. Net revenues for the property rose by 9.7 per cent quarter-on-quarter to just under US$1.02bn.

Genting Singapore to generate US$1bn in operating cash flow to 2024

Moody’s Investors Service expects Genting Singapore to generate SG$1.4bn (US$1.0bn) in operating cash flow up to December 2024. Moody’s says this coupled with the company’s cash balance, will aptly cover projected capital spending of approximately SG$1.0bn, an estimated dividend payout of around SG$0.6bn and minimal debt repayment.

According to analysts, as of June 30, Genting Singapore had a “strong net cash position” with a “cash balance of around SG$3.4bn, compared with lease liabilities of just SG$3m.” It said Genting Singapore’s A3 issuer rating reflects the company’s 100 per cent ownership of Resorts World at Sentosa, which operates Resorts World Sentosa (RWS), and that Genting Singapore expects to retain full access to the resort’s cash flow.

In the first half of the year, Genting Singapore posted a net profit of SG$276.7m (US$205.6m). Gaming revenue rose 57 per year-on-year to SG$746.9m (US$555m) and non-gaming revenue 82 per cent to SG$333.2m (US$248m). Genting Singapore’s consolidated revenue was up 63 per cent to SG$1.08bn (US$803m).

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