Even on a luck-adjusted basis, results missed expectations. Less optimistic on VIP market than last Q.
CONF CALL
- Korea: Jeju opportunity will meet IRR goal. Has good database of customers.
- Will start construction in 3Q 2014
- According to Jeju law, have to invest US$300MM, then can apply for gaming license. Some risk involved but it should be just a formality.
- Genting Singapore did not get gaming license until one week before they opened
- May invest more $$$ once they have more clarity on Korean market; possibly 1-2 more deals
- Jeju capex: will not provide that # at this time; need govt approval
- Why 5% stake in LIDL? Business gesture.
- CRA does have oversight over all GENT investments
- Will have real estate in the Jeju project
- Japan: believe 1st gaming bill may be passed some time in June 2014. There will be a 2nd gaming bill.
- Does not see any construction until 2017
- Tokyo/Osaka being talked about
- Adjusted EBITDA hold impact: $60-70MM
- VIP win rate: 2.5%
- GGR share: 50%
- VIP RC share: 53%
- Mass volume share: 43%
- Slot volume share: 44%
- VIP revenue as a % of net revenue: 36%
- VIP revenue as a % of gross revenue: 57%
- Mass table hold is about 22%.
- Trade receivable impairment going up: because RC volume went up
- Combined mass market in Singapore: flat growth; regional currency has depreciated vs S'pore $ - affecting casino and non-gaming.
- 4Q higher cost structure: more prudent in provisions impacted margins; everything else has been consistent with past Q. Cost structure different from MBS - payroll costs higher, operating expenses also different
- May see some growth in the mass market in 2014
- 'Cautiously optimistic' on the VIP market - many uncertain things going on in China
- RMB will be appreciating against S'pore $. RMB won't have any effect on VIP business. However, all Southeastern currencies have depreciated against S'pore $ - mostly affect very low end and very high end segments.
- 20,000 daily visitors (11,700 are to USS, rest from aquarium), average spend for USS: $83, average spend for aquarium is $30;
- VIP volume will not be impacted by currency; cautiously optimistic on volume
