Genting Singapore (GS) reported FY12 revenue down 9% at S$2948.1m, or 4.6% shy of our forecast, mainly due to lower gaming business volume. Net profit came in around S$677.7m, down 34%, and was 4.4% shy of our estimate. GS declared a final dividend of S$0.01/share, unchanged from last year. Going forward, GS is also slightly more upbeat about RWS’ performance this year, citing the more positive global economic outlook. Besides the VIP segment, GS intends to focus on the mass market by targeting visitors from Malaysia and Indonesia. It adds that it is well placed to capitalize on investment opportunities in related leisure/gaming business, after raising some S$3b from perpetual securities last year; but did not give specific targets. While our DCF-based fair value improves from S$1.33 to S$1.52, we maintain our HOLD rating on valuation grounds. But an accretive acquisition could provide the catalyst for a re-rating.
FY12 results mostly in line
Genting Singapore (GS) reported FY12 revenue down 9% at S$2948.1m, or 4.6% shy of our forecast, mainly due to lower gaming business volume. Net profit came in around S$677.7m, down 34%, and was 4.4% shy of our estimate. Adjusted EBITDA was down 19% at S$1361.5m, affected by higher impairment loss on trade receivable and higher operating costs incurred for the opening of MLP (Marine Life Park). GS declared a final dividend of S$0.01/share, unchanged from last year.
Recovery in VIP gaming business
For the quarter, we understand this was led by a recovery in its VIP gaming business, which management said “went up very significantly QoQ” and rolling chip volume was as much as in 1Q11 – one of the highest since it opened. While this also resulted in higher account receivable to nearly S$1.0b, management said it was also consistent with the volume of business. GS added that it is comfortable with receivables going up to S$1.1-1.2b.
Outlook slightly more upbeat
Going forward, GS is also slightly more upbeat about RWS’ performance this year, citing the more positive global economic outlook. Besides the VIP segment, GS intends to focus on the mass market by targeting visitors from Malaysia and Indonesia. Recall that it had recently won a land tender in Jurong where it intends to build 500-room hotel to cater to the family-oriented visitors. It adds that it is well placed to capitalize on investment opportunities in related leisure/gaming business, after raising some S$3b from perpetual securities last year; but did not give specific targets.
Maintain HOLD with higher S$1.52 fair value
As results were mostly in line, we are keeping our FY13 forecasts largely unchanged. While our DCF-based fair value improves from S$1.33 to S$1.52, we maintain our HOLD rating on valuation grounds. But an accretive acquisition could provide the catalyst for a re-rating.
Genting Singapore (GS) reported FY12 revenue down 9% at S$2948.1m, or 4.6% shy of our forecast, mainly due to lower gaming business volume. Net profit came in around S$677.7m, down 34%, and was 4.4% shy of our estimate. Adjusted EBITDA was down 19% at S$1361.5m, affected by higher impairment loss on trade receivable and higher operating costs incurred for the opening of MLP (Marine Life Park). GS declared a final dividend of S$0.01/share, unchanged from last year.
Recovery in VIP gaming business
For the quarter, we understand this was led by a recovery in its VIP gaming business, which management said “went up very significantly QoQ” and rolling chip volume was as much as in 1Q11 – one of the highest since it opened. While this also resulted in higher account receivable to nearly S$1.0b, management said it was also consistent with the volume of business. GS added that it is comfortable with receivables going up to S$1.1-1.2b.
Outlook slightly more upbeat
Going forward, GS is also slightly more upbeat about RWS’ performance this year, citing the more positive global economic outlook. Besides the VIP segment, GS intends to focus on the mass market by targeting visitors from Malaysia and Indonesia. Recall that it had recently won a land tender in Jurong where it intends to build 500-room hotel to cater to the family-oriented visitors. It adds that it is well placed to capitalize on investment opportunities in related leisure/gaming business, after raising some S$3b from perpetual securities last year; but did not give specific targets.
Maintain HOLD with higher S$1.52 fair value
As results were mostly in line, we are keeping our FY13 forecasts largely unchanged. While our DCF-based fair value improves from S$1.33 to S$1.52, we maintain our HOLD rating on valuation grounds. But an accretive acquisition could provide the catalyst for a re-rating.
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