GGRAsia – GEN Sing comeback likely faster than some ops: Nomura

GEN Sing comeback likely faster than some ops: Nomura

May 10, 2021 Newsdesk Latest News, Singapore, Top of the deck

Business for Genting Singapore Ltd, the promoter of the Resorts World Sentosa casino complex (pictured in a file photo) in Singapore, is likely to be “one of the better tourism recovery stories due to its balance sheet strength and good control of Covid-19 in Singapore,” said a Sunday note from banking group Nomura, following the casino firm’s first-quarter earnings.

The firm had reported a net profit of SGD34.5 million (US$25.9 million) for the first quarter of 2021, down 73.7 percent from the previous quarter, according to a filing with the Singapore Exchange on Friday.

Nomura said it had anticipated there would be “not much further upside from domestic tourists” for Genting Singapore’s business, given the continued absence of meaningful numbers of foreign tourists, but that the extent of the decline in quarterly earnings had been “larger than we expected”.

Management of the pandemic in the city-state could nonetheless “enable Singapore to enact travel bubbles quicker than competing tourism destinations,” added Nomura analysts Tushar Mohata and Alpa Aggarwal.

Singapore’s Ministry of Transport said in an April 26 statement that the city-state had agreed with Hong Kong to start an air travel bubble between the two places on May 26. The launch of the travel bubble can eventually be delayed depending on the pandemic situation in each of the cities.

As of noon on Sunday, Singapore had reported “10 new cases of locally transmitted Covid-19 infection,” of which seven were “linked to previous cases”, stated the Ministry of Health.

As of the same time, Singapore had 395 active cases, and 60,933 cases discharged. A total of 31 deaths from the disease had been recorded as of that date.

Analysts Vitaly Umansky, Kelsey Zhu, and Louis Li, of brokerage Sanford C. Bernstein Ltd stated in a Friday memo, citing commentary by Genting Singapore: “As management believes that international visitation to Singapore will be unlikely to return in the near term, Resorts World Sentosa has been focusing on developing events and offering promotions to target domestic customers.”

Another institution, Maybank Investment Bank Bhd, noted in a Sunday memo, that it had hoped Singapore casino industry VIP play volume and mass-market gross gaming revenue (GGR) would “recover to 50 percent to 75 percent of pre Covid-19 levels this year”.

But analyst Samuel Yin Shao Yang observed: “Unfortunately, it is increasingly unlikely given the third Covid-19 ‘wave’ in Malaysia,” which he described as a “key market” for Resorts World Sentosa.

Maybank is now forecasting Singapore’s VIP volume and mass-market GGR in 2021 to stand at respectively 25 percent and 60 percent of pre- Covid-19 levels.

“Moreover, the Singaporean government announced on 4 May 2021 that the operating capacity of attractions, which includes integrated resorts like Resorts World Sentosa, will be reduced from 65 percent to 50 percent due to a recent rise in Covid-19 cases in Singapore,” stated Maybank’s Mr Yin.