Nomura predicts another soft quarter for Resorts World Sentosa
Analysts at Nomura believe Resorts World Sentosa (RWS) is unlikely to mirror the strong first quarter performance by its Singapore peer Marina Bay Sands (MBS), as reported by media. Analysts have attributed the projection to a number of factors, including reduced hotel room inventory, a weak macro environment and lower hold compared with a year earlier.
RWS 2.0 attractions: scope for improvement
However, there is scope for improvement once RWS 2.0 attractions start opening during the current quarter. “Barring any positive surprise on win rate, we therefore think that 1Q25 might still be weak year-on-year for GENS, and the weakened performance is likely to continue until RWS 2.0 attractions Minion Land, the Singapore Oceanarium, the Central Lifestyle Connector and an all-suite hotel in place of the Hard Rock Hotel start to open progressively from 2H25 and meaningfully contribute to earnings growth in 2H25/2026.”
This update follows an impressive result by MBS parent Las Vegas Sands’ first-quarter earnings that exceeded Wall Street expectations. The integrated resorts developer posted adjusted earnings of 59 cents per share for the quarter ended March 31, surpassing the analysts’ consensus of 57 cents per share, according to data compiled by LSEG, as reported by Reuters.
VIP rolling chip volume may witness recovery
In a note, analysts Tushar Mohata and Alpa Aggarwal noted RWS’ revenue for the first quarter of 2025 is expected to reach SG$650 million ($494 million) with earnings before interest, taxes, depreciation and amortisation (EBITDA) of SG$250 million ($190 million). Nomura’s analysts also noted that VIP volume growth and win percentage between Singapore’s two integrated resorts (IR) can differ materially. Additionally, according to analysts, RWS’ Q1 VIP rolling chip volume will be witnessing a recovery from the December quarter, it will be lower year-on-year due to lower hotel room inventory and the weakened macro environment.
“On win rate, 1Q24 was higher at 4.62 percent and if this normalised in Q125, there will also be a negative year-on-year impact from lower hold percentage,” the analysts wrote. Additionally, turning to non-gaming, the analysts wrote, “we think RWS’s revenue likely remained flattish-to-down year-on-year in 1Q25 because of lower hotel room inventory (~1,200 rooms in 1Q25 vs ~1,540 in Jan to Feb 2024, before refurbishments began in March 24).
Last quarter’s projections
Last quarter, Nomura analysts issued a similar projection for RWS, noting that it is unlikely the operator will mirror the strong VIP performance of its local rival Marina Bay Sands in the fourth quarter of 2024. This was mainly attributable to reduced hotel room capacity and seasonality expected to maintain weakness in the segment.
In November last year, RWS had its casino license renewed for a shorter two-year term instead of the usual three, with Singapore’s Gambling Regulatory Authority (GRA) citing “unsatisfactory” performance in tourism promotion and integrated resort development. Effective 6 February 2025, the decision follows an independent evaluation covering January 2021 to December 2023, conducted by a panel appointed by country’s the Minister for Trade and Industry (MTI).
