Banking group Nomura has downgraded Genting Singapore Ltd, on what the institution termed the “slow ramp up” of business following upgrades to the group’s Resorts World Sentosa (RWS) property in Singapore.
Maybank Investment Bank Bhd has maintained the casino firm at ‘hold’, though it noted in a Wednesday memo that Genting Singapore “came in below… expectations again largely due to elevated transformation related costs”.
Nomura’s change was flagged in a Tuesday noted, following Genting Singapore’s first-quarter results. The casino firm posted net profit of just under SGD65.2 million (US$51.2 million) for the three months to March 31, down 55.0 percent from a year earlier.
First-quarter adjusted earnings before interest, taxation, depreciation, and amortisation (EBITDA) stood at nearly SGD179.0 million, a 24.1-percent decrease from the prior-year period.
Nomura analysts Tushar Mohata and Alpa Aggarwal wrote, referring to property upgrades and a second phase of development at Resorts World Sentosa, known as RWS2.0: “The pace of recovery from RWS2.0 investments has proven materially slower than anticipated, prompting us to reassess our thesis.”
Though they added: “Downside is cushioned by the SGD0.04 dividend per share commitment providing circa 6-percent yield support, and eventual recovery potential as RWS2.0 assets mature, though timing remains uncertain.”
The analysts highlighted that VIP rolling market share at Resorts World Sentosa “dropped to an all-time low of 20 percent,” versus the property’s rival in the Singapore duopoly, Marina Bay Sands, run by a unit of Las Vegas Sands Corp.
“Genting Singapore’s first-quarter adjusted EBITDA was a significant miss, accounting for 18 percent and 19 percent of our previous and Bloomberg consensus estimates for full-year 2026, respectively,” the Nomura team added.
Nomura’s analysts stated regarding the property’s VIP gambling business, there had been an “unexpected” 24 percent quarter-on-quarter decline in VIP rolling chip volume to SGD5.6 billion.
That was “contrary to seasonal trends where the first quarter has typically been the peak quarter for gaming” in that market, they added.
The analysts stated: “This fall is stark versus Marina Bay Sands’ 34 percent quarter-on-quarter jump in VIP rolling chip volume.”
The institution also said Genting Singapore’s margin on adjusted EBITDA “compressed to 29.5 percent” in the reporting period, from 37.7 percent in the first quarter of 2025, “despite revenue declining by only 3 percent, representing negative operational leverage”.
Nomura noted that management commentary had highlighted elevated costs from ongoing information technology infrastructure modernisation, higher marketing and promotion expenses, “pre-opening costs for new activations, phased asset refresh and hotel renovations continuing through 2026, and enterprise integration investments”.
The institution stated it was lowering its full-year 2026 EBITDA estimates by 26 percent, to about SGD759 million, and its net income estimates by 36 percent, to circa SGD356 million.
It also expected consensus estimates to be “revised lower materially to reflect the weaker operating trends and higher cost base”.
Maybank said – citing management commentary – that “transformation costs” at Resorts World Sentosa were likely “to remain elevated through 2026”.
Its analyst Samuel Yin Shao Yang stated, referring to upward pressure on global costs for oil: “Genting Singapore is also wary that the continuing conflict in the Middle East has driven up costs.”
“At the same time, higher airfares are weighing on travel demand and softening consumer sentiment,” Mr Yin added.
