GEN Singapore cuts 2024 estimates on Q4 miss

Casino operator Genting Singapore’s fourth-quarter results were “mistakes” versus analysts’ consensus, mainly due to “several one-off items,” a recent note from Morgan Stanley Asia Inc. suggests.

Genting Singapore reported two weeks ago that its earnings before interest, taxation, depreciation and amortization (EBITDA) for the last quarter of 2024 were $241 million, a “consensus of $260 million versus $290 million.”

“This increased even though EBITDA was higher than the theoretical VIP win rate of 3.6 percent,” analysts Praveen Choudhary and Gareth Leung wrote.

Genting Singapore is the operator of Resorts World Sentosa, one of Singapore’s two casino resorts. The company is a subsidiary of Malaysian conglomerate Genting Bhd.

The one-off item exclusion recorded in Q4 2023 “provides a better operating rate” for casino companies, according to the agency.

Those items included a higher offer of $56 million “compared to US$16 million in Q1 and Q2 respectively” in the three months to Dec. 31.

While the fourth-quarter numbers “should not be a new utilization rate” for the company, the Morgan Stanley team said the “higher offering was justified because VIP rolls doubled year-over-year in 2023.”

In the last quarter of 2023, Genting Singapore’s non-gaming EBITDA was “down 30% quarter-on-quarter due to seasonality, impacting volume and reducing margins,” analysts said

“There were also other one-off items worth S$30 million ($22.5 million) in the fourth quarter of last year, including cash bonuses that may not appear in 2024 and one-off costs for hotel negotiations,” they added.

Still, the brokerage said it had cut its 2024 estimate of Genting Singapore’s net profit by 6% to S$2.5 billion. Those results represent a 5% year-over-year increase and 3% above 2019 levels. It also cut the casino company’s 2024 EBITDA estimate by 7% to S$1.1 billion.

Morgan Stanley said the downward revision is expected to cause “reconstruction disruptions” due to the expansion.

“Estimated net income for 2024 was S$664 million, down about 15%,” Morgan Stanley said, reflecting a decline in EBITDA and an increase in depreciation and amortization. “Estimated EBITDA for 2025 was unchanged at S$1.3 billion,” it added.

“We believe revenues and dividends will grow annually from 2024 to 2026,” analysts said, adding that the number of visitors arriving in Singapore “will increase” “driven by visa-free travel plans with China and the support of new attractions at [Resort World Sentosa] in 2025.

Genting Singapore posted full-year net income of S$2.42 billion for 2023, up 40.1% year-over-year.

BY: 카지노사이트

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