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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