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Still great, but not as great as we thought.

We don’t want to take anything away from Genting Singapore’s terrific quarter reported yesterday.  However, after further review, they are not as good as they first appeared.  The positive VIP hold impact was greater than we thought.  Mass also held higher than we thought.  Thus, actual volumes were lower than discussed in our note yesterday.  The upshot here is that normalized EBITDA was S$425 million versus our initial normalized impression of S$450 million.  Including the high hold, actual EBITDA was S$503 million. 

April was clearly the standout month in the quarter and while May and June volumes were weaker, both months benefited from the high hold.  We don’t expect April volumes to be replicated anytime soon.  Here are some additional thoughts:

  • VIP Hold benefit on EBITDA was higher than our initial estimate of S$50MM and was likely closer to S$65MM
    • While the company said that normal EBITDA margins are in the 48-58% range assuming normal hold, we think that normal margins are closer to the low end of that range rather than the mid-point.
    • VIP as a % of gross win was 60% not 64% (as we wrote about earlier)
    • We estimate that RC volume was about S$14.5BN and the win rate was around 3.75%
    • Normal hold is 2.8-2.85%
  • Mass also held above the company’s “normal range” of 16-20%.  We think the benefit of high hold on Mass could have benefited revenues by $20MM.  We estimate that Mass win was approximately $230MM.
  • We estimate that win per EGM/slot was just under USD$800/day or S$1,100/day
  • Non gaming was likely between 12-15% of reported net revenues
    • F&B and other hotel revenues are roughly equal to room revenues
    • Other non-gaming revenues aside from hotel, F&B, and USS include revenues from the car park, retail and MICE business
  • Spend per visitor at Universal Studios decreased sequentially since there were more promotional giveaways in the first quarter.

Model tweaks:

  • 2010:  We estimate that RWS can produce revenues of S$2.74BN and EBITDA of S$1.45BN for 2010.  Treating the UK operations as discontinued starting 3Q2010, we assume the Genting Singapore can do S$3.0BN in revenues and S$1.2BN of EBITDA.
  • 2011:  We project that RWS can produce revenues of S$3.4BN and EBITDA of S$1.7BN.  After corporate overhead, our 2011 EBITDA estimate is S$1.5BN.