The operator of Resorts World Sentosa acknowledged that international visitor arrivals to Singapore “will be unlikely to return in the near term”.
Genting Singapore reported a net profit of SGD34.5m ($25.9m) for Q1 2021, down 73.7 percent on the previous quarter.
The company, which operates Resorts World Sentosa, reported revenue of SGD277.9m for the period, a decline 11.6 percent from Q4 2020, and down 31.7 percent from the same quarter a year earlier.
Gaming revenue for the quarter was up by 1.6 percent sequentially to nearly SGD216.9m, but it was still 19 percent lower than the prior-year period.
The operator recorded adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) of SGD128.1m, 39.4 percent less than in the last quarter of 2020, and down 15.5 percent year-on-year.
“While the global rollout of vaccines has begun, international travel continues to suffer from significant disruption due to resurgence of virus cases in several of our key source markets,” Genting Singapore said in a statement. “It is envisaged that international visitor arrivals to Singapore, especially for leisure purposes will be unlikely to return in the near term.”
The firm confirmed it remains in the running for an integrated resort licence in Japan. “We continue to engage with the relevant stakeholders for the request-for-proposal (RFP) issued by Yokohama City,” the company stated.
Despite the fall in net profit from the previous quarter, banking group Nomura suggested Genting 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 the city-state.
In a note at the start of May, Nomura said it had anticipated there would be “not much further upside from domestic tourists” for Genting Singapore’s footfall. Nevertheless, analysts Tushar Mohata and Alpa Aggarwal conceded the extent of the decline in quarterly earnings had been “larger than we expected”.
Brokerage Sanford C. Bernstein noted that Genting Singapore had been striving to adjust to the lack of international visitors.
“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,” wrote analysts Vitaly Umansky, Kelsey Zhu, and Louis Li.
Meanwhile, Maybank Investment Bank had previously suggested 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”.
“Unfortunately, it is increasingly unlikely given the third COVID-19 ‘wave’ in Malaysia,” a “key market” for Resorts World Sentosa, noted analyst Samuel Yin Shao Yang.
Maybank is now forecasting Singapore’s VIP volume and mass-market GGR in 2021 will stand at 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,” Yin added.