Resorts World Las Vegas ramp-up slower than expected: Nomura

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Malaysia’s Genting Berhad says its recently launched US$4.3 billion Las Vegas integrated resort, Resorts World Las Vegas (RWLV), was “cash flow positive” in 4Q21, however analysts have described its ramp-up as slower than expected.

According to details outlined by Nomura’s Tushar Mohata and Alpa Aggarwal in an overnight note, RWLV recorded revenue of around MYR716 million (US$170 million) and EBITDA of MYR96 million (US$23 million) in the December quarter, largely in line with 3Q21 revenue and EBITDA of MYR723 million (US$175 million) and MYR110 million (US$27 million) respectively.

While Genting Bhd said the property “continues to build its base of business and databases,” the analysts weren’t so positive.

“Given consensus expectations of a continued ramp-up in RWLV, this performance might come as a negative surprise,” they wrote.

For its first six months of operations, RWLV recorded revenue of US$346 million and EBITDA of US$50 million versus Nomura projections of US$245 million in revenue and US$57 million in EBITDA.

“Management mentioned that the business suffered slightly from imposition of the face mask mandate at public indoor places by the state of Nevada from 30 July 2021, some convention cancellations and weekday business softness,” the analysts said following Genting’s 4Q21 earnings call. “The mask mandate has now been removed from 10 February 2022.”

Genting Bhd’s group-wide results for the December quarter saw revenue up 59% year-on-year to MYR4.84 billion (US$1.15 billion), while Adjusted EBITDA grew 37% to MYR1.61 billion (US$383 million). The group recorded a 4Q21 profit of MYR46.8 million (US$11 million).

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