One of the main reasons for the drop in Genting Singapore’s share price was its disappointing second-quarter earnings for FY2024. The company reported a sharp decline in adjusted EBITDA, which fell by 46% quarter-on-quarter and 23% year-on-year. This decline was largely due to a significant drop in the VIP win rate and higher-than-expected bad debt losses. The VIP win rate fell to 2.9% in Q2, compared to the theoretical hold of 3.3% and 4.6% in the previous quarter, contributing to the weaker financial performance. Additionally, bad debt losses increased by 213% year-on-year, exacerbating the impact on profitability.
Despite these challenges, there are signs of recovery for Genting Singapore. Maybank Research has highlighted that all major operating metrics, including VIP volume, mass tables gross gaming revenue, and slot machine revenue, are trending higher quarter-on-quarter. The company’s EBITDA is expected to recover to pre-COVID levels by the end of FY2024. However, the recovery is gradual, and the share price remains under pressure due to the immediate impact of the Q2 results.
In terms of broker recommendations, analysts remain cautiously optimistic about Genting Singapore’s long-term prospects, maintaining a “Buy” rating but adjusting target prices slightly downward due to the near-term challenges
Overall, while the recent earnings report led to a drop in the share price, the company is on a path to recovery, with key metrics showing improvement. Investors should watch upcoming quarters for signs of sustained recovery.
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