Genting Singapore suffers massive drop in client count

Looks like its 38% profit crash won't rebound.

According to Maybank Kim Eng, GENS represented that business, especially mass market drop, from Singaporeans continues to fall due to the challenging domestic economy. This is offset somewhat by increased mass market drop from Malaysians.

Here's more from Maybank Kim Eng:

On 22 Aug 2012, budget airline, Scoot, launched its first route to and from China in Tianjin. GENS hopes to derive more mass market drop from the Chinese going forward.

Updates on its foray into Japan. GENS believes that a change in the Japanese government is likely in the next three to four months and that a new Japanese government will be interested in liberalizing its casino industry.

That said, we are not overly excited as we do not believe that any positive news flow relating to this will materialize over the next six months.

Prospects not improving. Although RWS’ share of VIP volume was boosted to 49% in 1Q12 due to the opening of the 194-room Equarius Hotel and Spa Villas, it eased to 47% in 3Q12 likely due to the departure of some key staff. While 3Q12 provision for doubtful debts of SGD32m was down 44% YoY, as a percentage of VIP gross gaming revenue (GGR), it is at an uncomfortably high 9%.

Lower VIP volume and win rate YoY and QoQ. 3Q12 core net profit was down 38% YoY as (i) VIP volume fell 20% YoY and (ii) the VIP win rate of 2.8% was c.40 bps lower YoY.

Offsetting this is provision for doubtful debts that fell 44% YoY to SGD32m. 3Q12 core net profit was down 4% QoQ as (i) VIP volume eased 3% QoQ and (ii) the VIP win rate of 2.8% was c.30 bps lower QoQ. 

3Q12 core net profit of SGD133.5m (-38% YoY, -4% QoQ) brought 9M12 core net profit to SGD495.5m (-35% YoY) which was below expectations at 70% of our full year estimate and below consensus at 66% of consensus estimate.

9M12 revenue of SGD2.2b (-11% YoY) was marginally below expectations at 73% of our 2012 estimate. No dividends were declared in the current quarter.

 



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