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An EBITDA beat when excluding the impairment charge but the bad debt write off is a concern as is the cautious forward commentary.


Q & A

  • Japan
    • Osaka:  a lot more interest lately. 
    • Tokyo governor have hands full with 2020 Olympics.
    • Still believe there are 3 candidates:  Osaka, Tokyo, Okinawa.
    • Categorically denied any discussions with USJ regarding a JV.
    • Japan:  optimistic the bill will pass in November/December.  Japan officials open to an accelerated process.  Genting believes there will be only one operator.  Osaka will probably go first but need approval of federal govt.
      • Is it imperative to have a local partner?  Don't think this so.  1 or 2 Japanese companies want majority ownership of IR.  Genting says operating a casino is difficult and feels those companies would need guidance.
      • Osaka investment:  $5bn seems to be the benchmark
      • Tokyo investment:  $10bn seems to be the benchmark
  • 2Q Bad debt (impairments) $81m:  made special provisions this quarter relates to debts which were 9-12 months past due. Very prudent. Still believe situation in major core markets are soft and challenging. Believe the $81m is an one-off.
  • Excluding bad debt provision, EBITDA margin would have been at normal level
  • Impairment:  
    • Relating to 9-12 months debt
    • Still within acceptable ratio band.  Will be sensitive to macro environment.
  • Market will be quite challenging in the next 6-12 months
  • VIP win %:  normal at ~3%
  • Mass win %:  24%
  • GGR share:  49%
  • RC Volume share: 60%
  • Mass/ETG drop share:  44%
  • VIP/MASS rev split:  57%/43%
  • Korea Jeju project:  central govt fully support IR; Jeju governor supports the project as well.  Would like to start construction in 1Q 2015.  Genting's share of capex of $2.5bn:  <$500m.   Will provide more numbers later this year.
  • Landing development's other contract:  Hyatt hotel in Jeju;  Genting in discussions with them on this.
  • If the Hinderlands (Northern remote provinces of China) do well, Macau will do well.
  • Not overly concerned about the long-term prospects
  • More Chinese customers?  Not really. Numbers in-line with expectations.
  • Some softening in VIP market in next 2 quarters
  • 2Q Non-gaming revenue decline:  Aquarium did poorly.  Putting in some exotic animals in the aquarium.  Believe Q4 2014 or onward will see numbers some back.
  • Visitor arrivals:  Chinese visitation has dropped but quality of visitors have been slightly better.
  • RC Volume:  been maintaining similar levels.  
  • Opex change:  due to net exchange loss of $36m and also higher operating income in 2Q 2013
  • Singapore mass:  continue to see flat trends
  • Marine Life Aquarium:  7,000 visitors, average spend $32
  • USS: 10,000 visitors; average spend $80