Genting Berhad’s US$4.3 billion Resorts World Las Vegas (RWLV) project, due to open before the end of this year, is tipped to add 6% to the company’s 2022 EBITDA but will remain loss making at the net profit level for at least a few years, according to Nomura analysts.
The expansive Las Vegas Strip property remains on track for launch in 2H21, with construction now up to level 55 of the west tower and level 52 of the east, the main casino floor carpeted and the poker room, restaurants and some retail largely complete.
Modelling in revenue estimates for the coming years based on the gaming data of 24 nearby casinos located on and around the Las Vegas Strip, Nomura’s Tushar Mohata and Alpa Aggarwal estimate revenue of US$350 million and EBITDA of US$82 million in 2022, rising to US$477 million and US$112 million respectively in 2023.
“However, at the net profit level, given the depreciation/interest costs, we expect RWLV to remain loss-making in initial years,” they state.
“We assume a utilization of 50%/60%/70% for FY22F/23F/24F for RWLV, which we believe reflects a slow build-up of tourism and MICE activities in the post-COVID-19 era. We assume depreciation/interest expense for RWLV also starting in FY22.”
Nomura’s RWLV model suggests its new US property will contribute less than 10% of parent Genting Berhad’s group-wide revenue in 2022, which has been revised slightly upwards from MYR20.03 billion (US$4.87 billion) to MYR20.81 billion (US$5.06 billion). However group-wide net profit has been revised down 9% to MYR1.13 billion (US$274.8 million) in 2022 on RWLV ramp.
For FY21, the ongoing impact of COVID-19 on the group’s Malaysia, Singapore, UK, US and Bahamas operations has seen revenue revised down by 7% to MYR15.25 billion (US$3.71 billion) and net profit by 58% to MYR264 million (US$64.2 million).