The fourth-quarter results of casino operator Genting Singapore Ltd were a “miss” versus analysts’ consensus, mainly because of “several one-off items,” suggests a recent note from Morgan Stanley Asia Ltd.

Genting Singapore reported a fortnight ago earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$241 million for the final quarter of 2024, “versus consensus of US$260 million to US$290 million”.

“This was despite EBITDA being boosted by a higher-than theoretical VIP win rate of 3.6 percent,” wrote analysts Praveen Choudhary and Gareth Leung.

Genting Singapore is the operator of Resorts World Sentosa (pictured in a file photo), one of Singapore’s two casino resorts. The firm is a subsidiary of Malaysian conglomerate Genting Bhd.

According to the institution, the exclusion of one-off items recorded in the fourth quarter of 2023, “provide a better run rate” for the casino firm.

Such items included a higher provision of US$56 million in the three months to December 31, “versus US$16 million each in first quarter and second quarter”.

Although the fourth-quarter number should “not be the new run rate” for the company, the Morgan Stanley team stated that the higher provision was “justified since VIP roll doubled year-on-year in 2023”.

Genting Singapore’s non-gaming EBITDA in the final quarter of 2023 “fell 30 percent quarter-on-quarter because of seasonality, impacting volume … as well as margin,” said the analysts

There were also other one-off items worth SGD30 million (US$22.5 million) in the fourth quarter of last year, “including one-off costs on cash bonus and hotel negotiations, which may not be appear in 2024,” they added.

Nonetheless, the brokerage said it was cutting its 2024 estimates for Genting Singapore’s net revenue by 6 percent, to SGD2.5 billion. Such result would be up 5 percent year-on-year, and 3-percent above the 2019 levelts. It also reduced 2024 EBITDA estimates for the casino firm by 7 percent, to SGD1.1 billion.

Morgan Stanley said the downward revision incorporated “renovation disruptions” expected due to the expansion of the complex.

“Our 2024 estimate net profit is circa 15-percent lower to SGD664 million… reflecting lower EBITDA and higher depreciation and amortisation,” stated Morgan Stanley. “We keep our 2025 estimate EBITDA unchanged at SGD1.3 billion,” it added.

“We believe earnings and dividends will grow every year from 2024 to 2026,” likely “driven by rising” number of visitors arrivals to Singapore “helped by its visa-free travel arrangement with China, as well as improving air capacity and supported by new attractions [at Resorts World Sentosa] in 2025,” stated the analysts.

Genting Singapore posted an annual net profit of nearly SGD611.6 million for full-year 2023, on revenue that rose 40.1 percent year-on-year, to just below SGD2.42 billion.

In November, Genting Singapore said its board had approved a total investment of about SDG6.80 billion to upgrade and expand Resorts World Sentosa.

The figure includes “amounts which have been spent and the remainder to be invested over the next eight years,” stated the company at the time. That was a reference to a previous SGD4.5-billion pledge to the city-state’s authorities for the expansion of the complex, known as “RWS 2.0”.

The ongoing developments taking place at Resorts World Sentosa as part of its expansion – including the Universal Studios Singapore’s Minion Land and the Singapore Oceanarium – “are progressing well and on track to a soft opening in early 2025,” stated the company.