Nomura Revisits Genting Singapore EBITDA Facing Capacity Restrictions

Nomura Revisits Genting Singapore EBITDA Facing Capacity Restrictions

In a note last Tuesday, Banking group Nomura noted that Genting Singapore Ltd’s 2021 adjusted earnings before interest, taxation, depreciation, and amortization (EBITDA) are estimated to stand at SGD490 million /US$363.6 million.

According to the group, this was a significant decrease from its previous forecast. The new estimates factored in the prevalent capacity restrictions based on Singapore’s measures to curb the spread of COVID-19, which continued in the second half.

Genting Singapore announced that it recorded third-quarter adjusted earnings before interest, taxation, depreciation, and amortization of SGD102.5 million, which was 30.7 percent down from the previous quarter.

The memo issued on the same day as when the casino reported its third-quarter results included statements by bank analysts Tushar Mohata and Alpa Aggarwal.

They added that they do not expect the earnings to increase positively since Genting Singapore will continue to bank on the gradual reopening of the state to overseas visitors.

However, the possibility of Chinese visitors still looks unlikely given the country’s zero-Covid strategy”. It seems this scenario would continue to affect the group’s revenues in 2022 since China was previously their most critical overseas market.

Since September 8, when the state started the Vaccinated Travel Lane program, they have received tourists from various countries like the United States, Canada, Italy, France, the Netherlands, the UK, and Spain.

In addition, both Singapore and Malaysia announced that they would be permitting travel between the two countries for fully vaccinated citizens from November 29. Under this arrangement, travelers between Singapore Changi Airport and Kuala Lumpur, the Malaysian capital, would be subject to COVID-19 tests rather than serving quarantine, as has been the case.