Posted on: February 24, 2023, 05:54h.
Last updated on: February 24, 2023, 05:54h.
In another sign of vibrancy on the Las Vegas Strip, Resorts World Las Vegas posted record earnings before interest, taxes, depreciation and amortization (EBITDA) and sales in the fourth quarter.
Genting Berhad — the Malaysian conglomerate that controls the various Resorts World casinos — delivered its fourth-quarter results on Thursday, indicating its lone Strip venue generated revenue of $277 million on EBITDA of $47 million in the last three months of 2022. That’s up from third-quarter sales of $200 million and EBITDA of $18 million. Still, some analysts weren’t impressed.
Furthermore, we believe that part of the reason for the stronger 4Q22 performance was seasonality in the holiday weeks,” according to Nomura. “We estimate RWLV also has quarterly interest charges of $25 million and depreciation charges of $60 million, which will drag EBITDA into losses at the net income level.”
The $4.3 billion Resorts World Las Vegas, the Strip’s most expensive integrated resort in terms of construction costs, opened in June 2021. In the property’s early days, it grappled with restaurant changes and the effects of the coronavirus pandemic, including mask mandates.
Genting Bullish on Resorts World Las Vegas for 2023
While the Nomura analysts weren’t overly enthusiastic about the performance of Resorts World Las Vegas to wrap up 2022, the investment community is broadly constructive on the outlook for the Strip this year.
According to the Las Vegas Convention Visitors Authority, visits to Nevada are at 93% of pre-pandemic levels. Adding to the bull case for Strip operators, including Genting, is a resurgence in conventions and meetings as well as an attractive 2023 events calendar.
“Further, convention attendance has reached 97% of pre-pandemic levels and 2023 attendance is expected to surpass 2019 levels, as larger conventions return and new sporting events are introduced such as Formula 1 Las Vegas Grand Prix and NFL Pro Bowl in 2023,” noted the Resorts World operator.
Genting added that its Las Vegas property “will have its highest mix of convention base room nights in 2023.” The Genting venue, the first newly minted Strip property in over a decade, is situated at the northwest end of the Strip, where the Stardust Casino was previously located.
Genting New York Plans
Aside from Resorts World Las Vegas, Genting runs other US gaming venues. Resorts World New York in Queens is arguably the most notable outside of Sin City because it is widely believed that that property along with MGM’s Empire City Casino at Yonkers Raceway will be awarded two of three downstate casino permits.
With some bidders for a New York license promising expenditures of up to $5 billion, analysts believe Genting may try to divest some non-core holdings to fund New York expansion efforts.
“Genting Malaysia did not state how much it plans to invest [in New York] but did state that it will try to monetise non-core assets like its Miami properties which are valued at US$1 billion (we assumed US$500 million) before resorting to a rights issue,” wrote Maybank analyst Samuel Yin Shao Yang in a note to clients.
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