Genting Singapore’s strong 3Q results to boost sentiment, parent company

KUCHING: Genting Bhd’s (Genting) Genting Singapore Ltd (Genting Singapore) reported better-than-expected third quarter of financial year 2020 (3QFY20) results, which analysts opine should boost sentiment for Genting Singapore and its parent company.

The research arm of Kenanga Investment Bank Bhd (Kenanga Research) recapped that in a quarterly business overview released last Saturday, Genting Singapore reported a turnaround with core profit of S$73.2 million in 3QFY20 from core loss of S$116.5 million in the preceding quarter, netting year to date (YTD) first nine months of FY20 (9MFY20) core profit of S$9.9 million against market consensus FY20 net loss of S$158.7 million.

According to Kenanga Research, at the adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) level, Genting Singapore’s 9MFY20 earnings of S$215.7 million beat house and street’s FY20 full-year estimate of S$147.3 million and S$151.5 million, respectively.

“In last quarter’s conference call in September, management indicated that it was operating at 50 per cent of gaming capacity since the re-opening on July 1, 2020,” Kenanga Research said.

“This was somewhat reflected in 3QFY20 revenue of S$301 million which was half of the usual quarterly revenue pre-pandemic period.

“With vaccines against Covid-19 in their final stages before commercialising, better prospect for cross-border reopening should help to boost stock sentiment.

“In our view, we only expect a recovery to pre-pandemic level in 2022.”

On another note, the research arm gathered Genting Singapore still indicated that it is keenly exploring the Yokohama integrated resort opportunity in Japan.

“Although it is still half way from a full recovery, the surprisingly strong set of 3QFY20 results should boost sentiment for Genting Singapore and thus parent company Genting.”

For now, Kenanga Research kept its ‘outperform’ call on Genting.