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LVS INVESTOR DAY: PART 5

Singapore comments

MBS (CEO George Tanasijevich)

  • Thinks that they can maintain their mid 50s margins that were achieved last quarter
  • Margins by segment: Mass: 60+%; Slots: 60+%; VIP: 30+%; Hotel: 80+%; Retail: 80+%
  • Last quarter, 77% of the revenue was casino driven
  • Seeing consistent monthly growth in non-rolling win and slot win by month since opening. Combined non-rolling win per day is about $4.2MM
  • Monthly RC volume is approaching the high of $4.7BN.  In April, they were at $4.3BN and $4.5BN in June
  • RevPAR hit $292 in June
  • Average Gross Rents are > $300/SFT; they are 98% leased
  • Net leasing revenue of $33MM in 2Q11 with operating profit of $26MM - targeting a quarterly run rate of $55MM in leasing revenue and $50MM of GP at full ramp when all 575k SQFT are open... vs. 438,000 SQFT at 2Q11
  • Only issue in MICE is that they don't have enough space for all the business that is coming their way. Trade show average duration of 3-4 days with attendance of 3-50k; local events and weddings average 1-2 days duration with attendance of ; MICE has averaged 4-5 day duration with in attendance
  • MRT Metro station will open directly in front of their property which will enhance property access for customers and staff
  • S$500MM Deep Water Cruise Terminal, which will allow the largest cruise ships to dock there, is projected by the Singapore Tourism Board to bring in 1.6MM cruise passengers by 2015
  • Gardens of the Bay, a S$1BN development across from their property opening June 2012, is funded by the STB.  It expects to bring in 5MM visitors per year
  • Singapore Sports Hub has a S$1.3BN opening in 2014 adjacent to Marina Bay area
  • Continuing to optimize the gaming floor. Have the highest table limits in the world and an airline fleet for the high rollers.  Subject to government approval, they are looking to convert the suites at the top of Tower 3 to super high end Paiza suites
  • South of Tower 1, there is space for an expansion subject to government approval

Q&A

  • Before last Q, RWS was apparently doing a lot of junket volume, comping as high as 1.6%. Over the last Q, there has been a lot of 'paying attention' of who does business with who - particularly at RWS. So that's why their volumes got smacked. Don't believe that there will be a sea-saw of market share - but that MBS will be the clear market leader on the Mass side. On the high end they are very pleased on their collection ability. Losses are very minimal.  There also won't be a sea-saw; they are up and will stay up. 
  • Genting also has less experience in granting direct credit but they are experienced at it.
  • Doesn't expect that market to be volatile; it's growing
  • Mass is the most compelling part of the market - making $4.2mm/day with no credit risk.
  • Macau style junkets won't get approved in Singapore because the government doesn't want that. Singapore has very strict lending laws in Singapore and doesn't want the junkets breaking them.  The ones that do get approved will be wealthy people making good loans. 
  • Customers coming to Singapore are more affluent than the Macau or Vegas gambler
  • Given their location in Singapore, they benefit from all the other hotel rooms in Singapore
  • They are very room constrained right now. Looking to get more land to build more hotel rooms, ballrooms, and meeting space.