Genting blew out numbers this quarter. Even when adjusting for high hold the reported EBITDA number would have still been almost 50% above consensus.
Resorts World Sentosa reported revenue of S$860.8MM (US$618 MM) and EBITDA of S$503MM (US$362MM). Part of the massive EBITDA beat was due to high hold on their premium play business. While the company didn’t quantify the impact of high hold, they did say that normal margins would have been between 48-58%. Using an average of the “normal range”, we estimate that high hold benefited them to the tune of S$45-55MM in the quarter. Still S$450MM of EBITDA is nothing to get disappointed over. While the release was short on details and haven’t spoken to the company yet, below are our preliminary takeaways.
2Q2010 Preliminary Details
- We estimate that net casino revenues were approximately 87% of reported net revenues or S$753MM
- We estimate that gross casino revenue per day increased to S$10.3MM in 2Q2010 from S$8.2 in 1Q2010
- 64% of the gross win came from the VIP segment, with the balance coming from Mass table play and slots
- Given the high contribution from VIP and the estimated hold impact, the implications is that total RC was pretty massive – around S$16.5BN and that hold was about 3.65%. We’ll get more details after we speak to the company.
- While Genting made a useless comment that slot win was north of US$200/day, we estimate that slot & EGT win per day was approx S$1,000/day (US$737)
- We estimate that Mass table revenues were approx S$220MM
- Implied average rebates are about 1.1%
- Hotel room revenues were approx S$17MM (1,000 rooms, ADR: S$263MM, OCC: 70%)
- Universal revenues of $53.5MM (7,000 daily visitors / S$84 spend per visitor)
- Estimated fixed expenses were about S$20MM lower than we estimated
- Normalized taxes were around $80MM when you add back the impact of the impairment on the UK operations
2010 & 2011 outlook:
- 2010: We estimate that RWS can produce revenues of S$2.84BN and EBITDA of S$1.53BN for 2010. Treating the UK operations as discontinued starting 3Q2010, we assume the Genting Singapore can do S$3.1BN in revenues and S$1.27BN of EBITDA.
- 2011: We project that RWS can produce revenues of S$3.6BN and EBITDA of S$1.9BN. After corporate overhead, our 2011 EBITDA estimate is S$1.6BN.
