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Maybank cuts Genting Singapore earnings estimates as hotel renovations limit rooms
The bank expects lower VIP volume and mass-market gaming revenue through 2028 as renovations reduce the rooms available for high-value customers.
Maybank Investment Bank Bhd cut its earnings estimates for Genting Singapore Ltd by up to 18 percent on Friday, citing hotel renovations that are reducing room supply at the company's Resorts World Sentosa casino resort in Singapore.
The bank lowered its earnings forecast for financial-year 2026 by 18 percent and its estimates for 2027 and 2028 by 14 percent each, GGRAsia reported. Analyst Samuel Yin Shao Yang said the revisions reflected expectations for lower VIP volume and mass-market gross gaming revenue.
Maybank now forecasts VIP volume of SGD24.0 billion in each of the three years, down from SGD28 billion annually. It also cut its annual mass-market gross gaming revenue estimate to SGD1.5 billion from SGD1.6 billion for each year.
Renovations at the 464-room Hotel Michael have removed 232 rooms from inventory, leaving about 1,000 rooms operating across the resort, according to Maybank. Some renovated rooms are expected to be ready in the fourth quarter, while work begins on the other 232 Hotel Michael rooms and the 121-room Crockford Towers.
The changes are expected to bring the number of available rooms down to about 900. Genting Singapore expects Hotel Michael to fully reopen in first-half 2027 and Crockford Towers in early 2028, Yin said.
Genting Singapore reported third-quarter profit after tax of SGD54.7 million, a 42.2 percent decline from a year earlier. Maybank said third-quarter VIP volume of circa SGD6.0 billion was 15 percent below its expectations, while mass-market gross gaming revenue of circa SGD366 million was 9 percent below its forecast.
The bank also cited a third-quarter VIP win rate of 2.7 percent, below the theoretical rate of 3.5 percent. Yin said earnings before interest, taxation, depreciation and amortisation would have been SGD36 million higher at SGD198 million if the win rate had matched the theoretical rate.
Alongside the hotel renovations, Genting Singapore is undertaking the SGD6.8 billion RWS 2.0 expansion. The project includes two hotels with 700 rooms, additional Universal Studios Singapore attractions, and shopping, dining and waterfront facilities, with completion scheduled progressively through to 2030.