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A great Q on the surface but disappointing volumes and non-gaming revenues.

Genting Singapore reported net revenues of S$914MM and Adjusted EBITDA of S$538MM, which blew away our estimate by 5% and 17%, respectively, and beat consensus by even more.  However, after stripping away the impact of high hold, numbers would have been softer than our estimates.  By our math, high VIP hold of 3.8% boosted net casino revenues by S$139MM and EBITDA by S$132MM.  We are still waiting to speak to the Company to get more color on the quarter, but below are some preliminary thoughts on Genting’s quarter.


  • VIP gross win of S$707MM and net win of S$434.5MM
    • Genting disclosed that they had 59% market share RC volume in Singapore, which comes out to S$18.6BN
      • MBS reported RC volume of S$12.9BN, implying total market RC of S$31.6BN
  • Assuming, 3% normal hold, gross VIP revenues would have been S$149MM lower.  Post Goods & Services Tax (GST) and player rebate, the net revenue impact would have been S$139MM.  The only other variable expense is the 5% tax rate, which gets us to an EBITDA impact of S$132MM
  • Our gross VIP number also jives with Genting’s affirmation of having 68% market share of VIP win
    • MBS reported gross VIP win of S$330MM, implying a market size of S$1.03BN
  • Our gross VIP number is 64% of GGR vs. management’s assertion of 62%
  • Our net VIP number is 54% of net casino revenues vs. management’s assertion of 50%
  • We estimate that the rebate rate was 1.3%
  • We have less information on Mass table win and slot win, so we will address those details in a subsequent note.  However, our sense from the call was that Mass drop was lower than we estimated (flattish QoQ) with higher hold.
  • Non-gaming revenues were disappointing missing our estimate by $20MM
    • RevPAR was down sequentially, we were led to believe that it would be up.  Room revenues estimated at S$26MM, were $3MM below our estimate.
    • F&B and other was S$25MM about $7MM lower than our estimate
    • USS revenues fell S$10MM short of our expectations.  Despite Battlestar Galactica opening on Feb 21st, daily visitation actually decreased QoQ and were even a little lower than 3Q2010 volumes.  This was somewhat offset by better spend per visitor.
  • On the bright side it looks like fixed expenses declined by about S$15MM sequentially