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Genting Singapore reports a blow out quarter




Resorts World Sentosa blew away numbers this quarter.  RWS reported revenues 18% above consensus while EBITDA beat the Street by 63%.  In USD, they reported $618.4MM of revenues and $361.7MM of EBITDA.


  • Group Results: 2Q2010 Revenue of S$979.3 million and EBITDA of S$513.9 million (52% margin)
  • Singapore IR Results: Revenue of S$860.8 million and EBITDA of S$503.5 million (58% margin)
    • "Universal Studio Singapore (“USS”) increased its daily maximum capacity to about 8,000 with an average visitor spend of S$84."
    • "RWS hotels‟ occupancy was 70% with an average room rate of S$263."


  • Had a higher than average win % in the quarter that helped them
  • Had over 3MM guest visits
  • Occupancy and rates continue to ramp up
  • USS Theme Park has already turned cash positive
  • Casino:
    • VIP/grind ratio - 64% (including the higher hold factor)
    • 100 VIP tables
    • Satisfied with win per table
    • 1,200 slots in operations, continued to exceed their operations
  • Launched Maxim casino for premium play
  • Also optioned a ladies only section in their casino
  • Have a slew of new offerings coming online this quarter (entertainment / F&B) which should help expand results


  • Impact of high hold in the quarter?
    • They won't quantify the impact
    • EBITDA margin would have been 48% in the 1Q excluding the pre-opening costs.  Normalized margins would have been between 48-58% if not for the high hold.
  • June vs. April was not a huge difference in trends for them  - because for the month of April they were still operating in mostly a monopoly environment. April was actually a peak for them.
  • Current rebates being offering to direct VIP 
    • Similar to Genting Highlands: 0.6%-1.4%
  • Junkets: Still waiting for approval.  Not sure that the approval will come this quarter.
  • No comment on the ramp up for the rest of the year
  • Phase 2 for RWS: 
    • Starting the construction of the Marine park a few weeks ago
    • Staged opening beginning in 2Q2011-4Q2011
  • Average Mass tables?
    • 380 tables (overall) so 280 Mass
    • Table count today - 410 tables on average
    • 450 by year end
    • Mix of Singaporeans coming to the resort? 
    • Quite a bit of people are coming to just the park. 2/3 of visitors to the resort are foreigners.
  • Casino entrance: 20-30k visitors per day on average
  • Number of hotel rooms open in the quarter?
    • A little over 1,000
    • Have 1,300 rooms open right now. Only have another 200 rooms to go for PH1.  PH2 is towards the end of 2011.
  • Mass market win rate?
    • Was also slightly higher than normal
  • Started tapping visitors from new markets like India and Thailand
  • They have 300 EDG's. They will increase the total number of machines by year end to 1,300-1,400 (including EDG's).
  • Tax rate?
    • When they took an impairment for the UK license - they had to release the deferred tax liability into the PNL - so the reported "tax" this quarter is not reflective of cash taxes. 
  • Baccarat tables as a % of total tables?
    • 60% to two-thirds or so
  • Ramp up of USS - plan to ramp up to 10,000-12,000 visitors by Jan 2011 and 18,000 -20,000 by Jan 2012
  • Spend per visitor at USS of S$84 includes F&B and merchandise
  • Expectation of the sale of the UK assets?
    • Expect that the shareholders to approve the sale
    • Holding their annual general meeting on the 18th of August and Genting Malaysia is holding theirs on 8/24
  • Casino revenues were still over 75-80% for the quarter
  • Use of proceeds from UK operations?
    • Too early to discuss
  • Have not written off any bad debt.  Without the junkets taking on the credit risk, they need to deal with the customers directly. They will likely be taking similar provisioning for bad debt next quarter as they are in this quarter - which by the way is similar to the level of provisioning that Macau casinos take.
    • In the UK casinos, they do not take bad debt provisions
    • Impairment on receivables is just their way of taking bad debt reserves - not a write off
  • Why didn't they take a tax provision in Singapore?
    • If you back out the $86MM of deferred tax (due to the UK impairment), you will get to the Singapore tax
  • What % of customers at RWS are existing Genting Highlands customers?
    • Don't know or won't tell
    • Genting Malaysia will announce results towards the end of the month
  • Average length of stay for foreign visitors?
    • 2-3 days
  • Is the revenue calculation just S$84 x 7,000 visitors x days in the Q?
    • Yes
  • Once the sale of the UK is complete, Genting Singapore will focus on gaming operations solely in Asia (but really sounds like just in Singapore)
  • Depreciation - is the current amount a good run rate?
    • Reflects total capitalization taken to date, so it will increase slightly as the rest of their project gets completed
  • What % of the Mass contribution was from slots?
    • Won't disclose on the call at least
  • Were the normalized gaming revenues per day higher or lower than 1Q2010? 
    • Higher
  • EBITDA margins for USS?
    • Ballpark 20%
  • Casinos numbers that they report are net of commissions (rebates)
  • Capex left to spend on Phase 2: S$600-700MM