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Hold adjusted RWS Q4 EBITDA of S$300 million was extremely disappointing. Cautious tone on near term.

"The economic challenges in Europe and the United States of America continue to cloud the short-term outlook of the Asian economies. As the next 12 months remain volatile, we continue to remain cautious in our dealings and prudent in our approach."


  • Announced a dividend of 1 cent per share - way of saying thank you to shareholders
  • Got an A- from Fitch and a BBB- from Moody's
  • VIP business was in-line with their expectations and cautious lending outlook
  • 3.9% hold in 4Q
  • Transformers opening helped USS visitation
  • MICE operations: They welcomed more than 1MM visitors and hosted more than 200 events in 2011. 
  • Once construction is complete, management will be able to completely focus on revenue growth - including pursing new projects
  • Singapore dollar denominated perpetual preferred? 
    • 5 banks are the book runners on this offering and for this purpose, they have obtained credit ratings
    • No comment on use of proceeds or offering size
  • QoQ change in RC volume?
    • down 26% QoQ but win was higher because win was 3.9%
    • They notice when they have high hold, they have lower volumes
    • They have also taken a more cautious tone on credit extension, and you can see that in their provisions as well which have come down dramatically
  • They are still remaining cautious for the next 2 quarters with respect to credit extension but cautiously optimistic on 2H12
  • Only put in full complement of their new ETG's and slots in early February.  Can only have 2,500 machines. They were just a little shy of 2,500 machines.
  • Mass was down a little (2%). 
  • What was their rebate in 4Q? 
    • 1.2-1.3% range - hasn't really moved that much Q to Q
  • 4Q: 2,051 slot machines on average
  • VIP: Decline in 4Q - was it seasonal? 
    • They don't really know. They don't have enough operating history. 
    • They did pull back their credit extension so they are unclear how much impact that had
    • Without junkets they don't expect to see much growth in the VIP market
  • Expect the market to grow with junkets
  • If they are looking to project, they would look at all of 2011 and perhaps overweight trends in the 4th quarter
  • Lower impairments and lower credit risk is not the new norm either. Risk taking has a lot to do with their assessment of the overall economic environment.  Expect to take more risk later this year
  • The dividend was a show that they are cognizant of investor's desire of a dividend. 1 cent is not small compared to their EPS of 8 cents per share.  Growing the dividend depends on their assessment of growth opportunities
  • Net gaming revenue breakout
    • VIP: 44%
    • Mass: 56%
  • Gross VIP win is 52% of total gross win
  • Hold adjusted EBITDA using 2.85%: S$300MM
  • Still optimistic on junket approval
  • The visitation numbers to their casino were pretty steady.  VIP visitation and volume aren't very correlated though.
  • 80-90% of the people who come to the casino are coming from outside of Singapore
  • Still expect junkets to get approved in the next few months
  • Can't really compare their current margins to 2010 results since their non-gaming amenities weren't open then. Their non-gaming amenities have lower margins than the gaming business.
  • They have a lot of employees in the Marine Life Park and training them, but there is no associated revenue and won't be until the Park is fully open in the 4th Q
  • 2012 is going to be a transitional year for them since there are many employees (life guards, veterinary professionals, etc) that don't really exist in Singapore and therefore they need an extended training period.  Hired about 600 incremental employees between the Marine Life Park and the hotels that opened.
  • There will likely be some more rooms opening at Equarius which will reach 200 rooms
  • The Park will open in late 3Q.  In about 4 weeks time, they will start filling the tanks with water.  Have a quarantine center for animals... want to be very careful. By end of May they will fill the larger tanks. The tanks need to be flushed and cultured with good bacteria. Only once the water is stable they will start putting the fish in.  When the animals come into Singapore they first need to go into a quarantine center (2-4 weeks). 
  • Japan: somewhat optimistic that something may pass in Japan. They continue to track the development there as well as seriously looking at a few opportunities elsewhere. 
  • They have 559 total tables
  • Dec 31: 1502 slots and 549 ETG's
  • Mass share was 46% on the volume side (for slots as well); GGR share was 47%
  • The West zone has a very tropical and laid back setting - more of a Bali setting. 
    • They did a soft opening with 4-5 villas during CNY and their clients were very happy. They still aren't completely open yet.
    • Originally they were going to target the ME & and Eastern European market, but the Chinese customers also like it
  • Slot ramp from 3rd to 4th quarter? 
    • Win per slot went up a little bit despite the addition of new machines
  • There will be no new project announcements from them until 2H2012: The projects that they are looking at range from an equity commitment of S$500 to S$3/4BN.
  • 1/3 of the tables are VIP
  • December is a holiday month- they see a lot of traffic into the casino and the resort
  • Market share of RC: 47% 
  • By CNY they actually had 12 villas ready but decided to only open 4/5 of them - given the vegetation looking scrawny. It's very difficult to know how much impact the villas will contribute. To date only 12 customers have stayed in those Villas.
  • Half of the Equarius hotel is currently open and it is also meant for VIPs
  • Capex for 2012: S$600MM
  • Maintenance capex should be S$100-200MM once everything is complete. 
  • They will pursue opportunities anywhere in the world? Genting Malaysia has spend a lot of money in NY and they also bought the site in Miami - so they don't really have much money left to pursue new projects. They are the only other subsidiary of the Genting Group with any kind of real fire power so they would be the vehicle with which the Group would pursue any new opportunities globally
  • They do not intend to be at the S$300MM level for EBITDA in future quarters. The S$400MM level has been pretty consistent for them and should continue to see that kind of level/ floor


  • Genting Singapore reporting Adjusted EBITDA of S$398.8MM and revenues of S$786.3MM
    • RWS Adjusted EBITDA of S$405.9MM and revenue of S$782.5MM
      • S$644.8MM from gaming revenue and S$137.7MM from nom-gaming revenues
  • USS drove non-gaming growth with 10,250 daily visitors and average spend per visitor of S$86/day
  • Hotel occupancy was 89% with ADR of S$322
  • "The higher profit was attributable to the higher adjusted EBITDA of Singapore IR by 8% due to the lower impairment loss on trade receivable by S$36.2 million; and lower tax charge."
  • 2011 Capex:S$1,234MM 
  • "Equarius Hotel and selected Beach Villas opened in February 2012. The rest of the West Zone comprising a world-class destination Spa, Water Park, one of the world’s largest Marine Life Parks and the Aquarium will be fully operational by the second half of the year. With this last phase of development, the resort will be fully completed in 2012"
  • "Genting Singapore’s efforts are focused towards identifying, evaluating and investing in new projects that provide revenue growth and net income streams to the Group. The continuing uncertain economic climate also presents some potentially attractive investment opportunities."