Towards Financial Freedom
Genting Singapore - Implications of MBS' 2QFY15 results
- Las Vegas Sands Corporation (LVS) released its 2QFY15 results yesterday, which was a tad below consensus estimates. The group's Macau operations recorded an improvement in EBITDA margin QoQ in 2QFY15 on the back of cost-cutting measures and focus on highmargin mass market premium players.
- Marina Bay Sands' (MBS) results showed no signs of turnaround in the VIP business segment. MBS' EBITDA fell by 12.5% QoQ to US$363.3mil in 2QFY15 while revenue slumped by 9.1%. Casino revenue declined by 10.5% from US$631.9mil in 1QFY15 to US$565.7mil in 2QFY15.
- MBS was affected by a fall in the win percentage of the VIP players. Adjusting for the win percentage, MBS' EBITDA would have inched down by only 2.2% QoQ in 2QFY15.
- MBS' results indicated softness in the volume of business in the VIP and mass market segments in Singapore.
- Volume of VIP business fell by 5.8% QoQ and 9% YoY to US$9.5bil in 2QFY15. Volume of mass market players contracted by 5.5% QoQ and 5.3% YoY to US$1.0bil in 2QFY15.
- Win percentage of the VIP segment fell from 3.41% in 1QFY15 and 3.45% in 2QFY14 to 2.78% in 2QFY15. Win percentage of the mass market players rose from 25.3% in 1QFY15 and 24.8% in 2QFY14 to 27.55% in 2QFY15.
- In line with lower credit extensions, provisions for accounts receivable slid from S$32.6mil in 1QYF15 to S$26.9mil in 2QFY15. Casino trade debtors edged down from S$1.37bil in 1QFY15 to S$1.3bil in 2QFY15.
- Hotel occupancy rate inched up from 94.8% in 1QFY15 to 95.9% in 2QFY15. Average daily room rate declined from US$414 in 1QFY15 to US$377 in 2QFY15.
- MBS' weak 2QFY15 results is not a surprise as the anti-corruption drive in China has affected visitorship of the Chinese high-rollers. MBS' results are negative read-through for Genting Singapore's (GenS) results, which would be released on or before 15 August 2015. Maintain HOLD on GenS.
Source: AmeSecurities - 23 Jul 2015
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
