GGRAsia – GEN Sing recovery still several quarters off: analyst

GEN Sing recovery still several quarters off: analyst

Aug 19, 2020 Newsdesk Latest News, Singapore, Top of the deck

Full recovery of Genting Singapore Ltd’s casino resort business in Singapore following the Covid-19 crisis was “still several quarters away” due to the firm’s Resorts World Sentosa venue (pictured in a file photo) drawing “heavily” on “international tourism” compared Macau, where most tourism arrivals are from mainland China next door. That is the view of a Tuesday note from brokerage Union Gaming Securities LLC.

“While some gaming markets in Asia like Macau and Cambodia are gearing up for a recovery, the near-term outlook for Singapore, and Resorts World Sentosa (RWS) specifically, remains cloudy,” wrote analyst John DeCree.

He added that “historically,” international travellers accounted for “75 percent to 80 percent” of total visitor numbers at Resorts World Sentosa.

In early August, Genting Singapore posted a SGD163.3-million (US$119.2 million) net loss in the quarter to June 30, compared to net profit of about SGD168.4 million in the prior-year period. The company said in a filing to the Singapore Exchange, it was the “worst quarterly performance since the opening” of the Resorts World Sentosa complex in January 2010.

Gaming operations at the group’s main revenue generator, Resorts World Sentosa, were suspended for almost the whole of the second quarter – from April 7 until June 30 – as a Singapore government precaution against the spread of Covid-19. Gaming operations resumed, albeit partially, from July 1, while hotel operations only restarted on July 17.

“Currently, Resorts World Sentosa is operating at 50 percent capacity due to social distancing procedures. Further, the casino operators are only allowed to welcome existing loyalty club members with restrictions on issuing new memberships, which is limiting local visitation and one of the reasons we are cautious on any near-term recovery right now,” wrote Union Gaming’s Mr DeCree.

The analyst however pointed to some “modestly positive” developments regarding easing of travel, which “could modestly improve business activity for Genting Singapore over the next few months.”

“But we are not expecting any meaningful recovery until international travel across Asia begins to resume more freely, which is still likely several quarters away,” he added.