Genting Singapore’s net profit took a slide in the third quarter, down 63%. Analysts cited a slump in VIP play.
On 7 November the operator of Resorts World Sentosa (RWS) in Singapore announced third-quarter net profit of S$79.4 million (£46.3 million/€56 million/$59.4 million), versus S$216.3 million during the same period in 2023. Revenue for the quarter was S$562 million, down 19% from last year.
Genting Singapore attributed the drop to a decline in VIP patronage as Chinese high rollers lie low.
It’s a significant shift from the first half. According to Malaysia news site The Star, the Genting Berhad subsidiary delivered net profit of S$460.2 million for the first half of the year, up almost 42% year on year, exceeding analysts’ consensus. In August, Hong Leong Investment Bank (HLIB) said GenS “should continue its positive recovery momentum benefitting from recovery in foreign tourist arrivals in Singapore, particularly from Chinese tourists.”
HLIB also looked forward to “differentiated programmes and events to be unveiled [at RWS] in 2H24 and early-2025”.
Ramping up investment
On 22 November, the integrated resort (IR) will introduce the much-ballyhooed Harry Potter: Visions of Magic immersive art exhibit. The “evocative and interactive” experience, which has toured the globe, will bring two exclusive features to Singapore: the Chamber of Secrets and the Trap Door.
Starting this month, RWS also began construction of a S$6.8 billion waterfront development that will add two new luxury hotels and a Minion Land theme park at Universal Studios Singapore.
In 2019, RWS and Marina Bay Sands (MBS), its sole competitor in the market, agreed to invest a combined S$9 billion in new tourism and MICE facilities, in exchange for an extension of their duopoly through 2030.
As noted by the Straits Times, the new additions coincide with higher airport fees for visitors, increased competition in the region and global economic uncertainty. MBS continues the S$2.3 billion renovation of its three hotel towers, which will add 1,850 rooms including 775 suites.
RWS “buy” ratings intact
Responding to third-quarter results, HLIB trimmed its target price for GenS to S$1.22 from S$1.45. It also cut respective 2024-26 earnings projections by 26%, 24% and 24%.
Even so, MarketWatch reported that the brokerage maintained a buy rating on the stock and expressed optimism for 2025. Maybank also kept a buy on the stock, while cutting its 2026 core net profit forecasts by 16%-17%.
Maybank’s Yin Shao Yang said current and ongoing capital investments will pay off for the resort long term. He added that GenS is a contender for one of Thailand’s first casino licences. That country is now considering so-called “entertainment complexes” with gaming to resurrect tourism and increase international investment and revenues.
Genting Singapore is a subsidiary of Malaysian casino giant Genting Berhad, which controls 52.7% of shares.
