Management is getting more confident.
According to CIMB, 4Q12 results were driven by the VIP business where betting volumes hit a record of S$18.6bn, which was behind much of the S$369m in adjusted EBITDA for the period.
The estimated S$568m in 4Q12 VIP GGR was fuelled by credit, and 4Q12 operating cashflow happened to be the weakest for the full year at only S$135m.
Management is a lot more optimistic on the sustainable recovery of the VIP business than at the start of the year, and alluded to new faces on the clientele list and a new VIP marketing team in place.
Here's more from CIMB:
It is normal for the VIP business to be fuelled by credit, but our channel checks with junket operators show that they are increasingly less comfortable with the industry’s credit situation, with one operator likening it to an "unregulated sub-prime credit bubble".
We do not believe that the credit quality at GENS is better than junket credit and this structural disadvantage of not being able to rely on junket credit compared to the Macau operators will increasingly be an issue.
As at end-2012, GENS has S$956m in receivables outstanding and has written off S$264m since the start of operations.
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