GGRAsia – Nomura cuts GEN Singapore 2021 EBITDA over capacity limits
Nomura cuts GEN Singapore 2021 EBITDA over capacity limits
Genting Singapore Ltd’s adjusted profit before interest, taxes, depreciation and amortization (EBITDA) for the year 2021 is estimated by the Nomura banking group to be likely to reach SGD 490 million ($ 363.6 million), which the institution said in a note on Tuesday, was down from its previous forecast. The rating was released on the same day the casino group reported its third quarter results.
Genting Singapore promotes the Resorts World Sentosa casino complex (pictured) in Singapore.
The change in estimate “took into account persistent capacity restrictions in the second half of 2021” regarding Singapore’s countermeasures on Covid-19.
Analysts Tushar Mohata and Alpa Aggarwal said, “While short-term earnings are unlikely to surprise on the upside, we reiterate our positive stance on Genting Singapore to play the trend of gradually reopening Singapore borders to foreign visitors. “
But they added that the “return of Chinese nationals still appears to be some time away,” with China “still pursuing a zero Covid strategy”.
This is expected to “continue to impact” Genting Singapore’s revenue in fiscal 2022, “given that China was the most important overseas market before the pandemic,” Nomura analysts added.
Genting Singapore recorded adjusted EBITDA of SGD 102.5 million in the third quarter, down 30.7% from the previous quarter. In year-over-year terms, this is a drop of 31.2%, according to Tuesday’s press release.
As part of the Vaccinated Travel Lane program, which began on September 8, Singapore admitted tourists from several countries, including Canada, the United States, France, Italy, the Netherlands, Spain and the United Kingdom.
On Monday, Singapore and Malaysia announced that from November 29, the two sides would allow air travel for their fully vaccinated citizens, between Singapore Changi Airport and the Malaysian capital Kuala Lumpur. Under this program, fully bitten travelers will be subjected to Covid-19 testing instead of serving quarantine.