The overall cost of the expansion programme for Singapore’s Resorts World Sentosa (RWS) casino complex is likely to be higher than the initially-budgeted amount of SGD4.5 billion (US$3.36 billion). The information was provided by the management of Genting Singapore Ltd, the operator of the property, in a private conference call with investment analysts following the firm’s release of its fourth quarter results.
The expansion programme is a commitment by Genting Singapore to the city-state’s government, and was announced in April 2019. It involves the so-called “2.0” expansion of Resorts World Sentosa – or ‘RWS2.0’, as the programme is also known – as part of an arrangement that sees Genting Singapore keep until 2030 its half of Singapore’s casino duopoly.
“For ‘RWS2.0’, management indicated upside risk to the earlier budgeted amount of SGD4.5 billion due to cost escalations”, wrote analysts Tushar Mohata and Alpa Aggarwal of banking group Nomura, in a note on Genting Singapore referring to its management’s commentary during the Monday conference call.
In its fourth-quarter results filing to the Singapore bourse, Genting Singapore had only said its expansion projects under ‘RWS 2.0’ had “commenced”. These included “the ongoing construction” of the Singapore Oceanarium and of Minion Land at Universal Studios Singapore theme park, plus “supporting infrastructure facilities to cater to the overall expansion” of the resort.
Minion Land – which, according to previous announcements, is to open in 2024 – is based on the popular Hollywood animation franchise centred on the “Minions” characters.
Maybank Investment Bank Bhd wrote in a Tuesday note that also made reference to Monday’s conference call with Genting Singapore’s management, that the likely budget increase for ‘RWS2.0’ was “due to higher material costs”.
Analyst Samuel Yin Shao Yang added that completion of ‘RWS2.0’ could “be delayed to as late as 2028 or [a] half-year to one year after ‘MBS2.0’.”
The latter was a reference to a separate expansion programme being carried out at the Marina Bay Sands resort, the other half of Singapore’s casino duopoly. The ‘MBS2.0’ expansion programme was also announced in April 2019 and was initially budgeted at SGD4.5 billion.
Marina Bay Sands is run by a unit of United States-based casino operator Las Vegas Sands Corp. The firm announced in April last year it had agreed an amendment to its initial deal with the Singaporean authorities, which – in the casino entity’s words – now “extends the deadline for the firm’s Marina Bay Sands gaming resort to commence construction” of ‘MBS2.0’ “by one year, to April 8, 2023”.
In its latest annual report, published earlier this month, Las Vegas Sands said the company was “in the process of reviewing the budget and timing of the Marina Bay Sands expansion based on the impact of the Covid-19 pandemic and other factors”.
