Genting Singapore downgraded by Nomura after Q1 earnings fall
Banking group Nomura Holdings has downgraded Genting Singapore following what it described as a “slow ramp up” in business after upgrades at the group’s Resorts World Sentosa property in Singapore.
The downgrade followed Genting Singapore’s first-quarter 2026 results, which showed weaker earnings, lower gaming revenue and rising operating costs linked to the resort’s ongoing redevelopment programme known as RWS2.0.
In a Tuesday note, Nomura analysts Tushar Mohata and Alpa Aggarwal said: “The pace of recovery from RWS2.0 investments has proven materially slower than anticipated, prompting us to reassess our thesis.”
The analysts said the downside was partly supported by Genting Singapore’s commitment to a SGD0.04 (US$0.03) dividend per share, which they said provides around a 6 per cent yield. They stated: “Downside is cushioned by the SGD0.04 dividend per share commitment providing circa 6-per cent yield support, and eventual recovery potential as RWS2.0 assets mature, though timing remains uncertain.”
Profit and EBITDA decline in first quarter
Genting Singapore reported net profit of nearly SGD65.2 million ($51.2 million) for the three months ended 31 March 2026, down 55 per cent year-on-year.
Revenue for the quarter slipped 3 per cent to SGD607.6 million ($477.6 million), according to unaudited results filed with the Singapore Exchange.
Gaming revenue fell 7.8 per cent year-on-year to nearly SGD403.4 million ($317.4 million), affecting the group’s overall earnings performance.
Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped 24.1 per cent to about SGD179.0 million ($140.8 million).
Nomura said the first-quarter EBITDA result was “a significant miss”, accounting for only 18 per cent and 19 per cent of its previous estimates and Bloomberg consensus estimates respectively for the full-year 2026 forecast.
The institution also lowered its full-year 2026 EBITDA estimate by 26 per cent to around SGD759 million (US$596.7 million). Its net income estimate was reduced by 36 per cent to approximately SGD356 million ($279.8 million).
Nomura further stated that market consensus estimates were likely to be “revised lower materially to reflect the weaker operating trends and higher cost base”.
VIP market share falls
The analysts highlighted weakness in Genting Singapore’s VIP gaming segment. According to Nomura, Resorts World Sentosa’s VIP rolling market share fell to “an all-time low of 20 per cent” compared with rival Marina Bay Sands, which is operated by a unit of Las Vegas Sands.
Nomura said VIP rolling chip volume at Resorts World Sentosa declined 24 per cent quarter-on-quarter to SGD5.6 billion (US$4.4 billion).
The analysts described the decline as “unexpected”, noting that the first quarter has historically been the strongest gaming quarter in Singapore.
“This fall is stark versus Marina Bay Sands’ 34 per cent quarter-on-quarter jump in VIP rolling chip volume,” the analysts added.
Nomura also pointed to pressure on margins. Adjusted EBITDA margin fell to 29.5 per cent during the quarter from 37.7 per cent in the same period last year, despite revenue declining by only 3 per cent. The analysts described this as “negative operational leverage”.
Costs linked to RWS2.0 redevelopment
Nomura said Genting Singapore management had highlighted several factors contributing to higher costs, including ongoing information technology infrastructure modernisation, increased marketing and promotional spending, pre-opening costs for new attractions, phased hotel renovations and broader enterprise integration investments.
The redevelopment and expansion programme at Resorts World Sentosa remains one of the company’s key long-term projects. Genting Singapore has earmarked around SGD6.8 billion (US$5.35 billion) for the initiative.
The investment programme includes new hotels, upgraded attractions and expanded leisure facilities aimed at strengthening the resort’s appeal to international tourists and regional visitors.
Last year, the group opened new attractions and launched The Laurus hotel as part of its expansion strategy.
Despite weaker first-quarter results, Genting Singapore stated that its gaming business improved towards the end of the reporting period and that it had made “steady operational progress” during the quarter.
The company also reported growth in its non-gaming business. Non-gaming revenue rose 8.3 per cent year-on-year to SGD204.1 million (US$160.6 million), supported by higher visitor numbers at attractions including Universal Studios Singapore and the Singapore Oceanarium at Resorts World Sentosa.
Maybank maintains ‘hold’ rating
Meanwhile, Maybank Investment Bank maintained its ‘hold’ rating on Genting Singapore. In a Wednesday memo, analyst Samuel Yin Shao Yang said the company had again performed below expectations mainly because of elevated transformation-related costs.
Maybank added that transformation costs at Resorts World Sentosa were likely to “remain elevated through 2026”.
The bank also cited wider economic pressures affecting the tourism and gaming sectors.
“Genting Singapore is also wary that the continuing conflict in the Middle East has driven up costs,” Yin stated. “At the same time, higher airfares are weighing on travel demand and softening consumer sentiment,” he added. Genting Singapore said it is responding through targeted promotions, seasonal events and market-focused initiatives aimed at supporting visitor traffic and spending across the integrated resort.
Stay ahead of iGaming’s biggest stories with SiGMA’s Top 10 News countdown. The world’s biggest iGaming community brings you weekly insights and subscriber-only offers. Join HERE today.
