UPDATE 1-Genting Singapore's Q2 disappoints as gaming revenue slows

Fri Aug 10, 2012 7:17am EDT

* Genting Singapore Q2 EBITDA S$306.3 mln vs consensus S$361
mln
    * Hotel occupancy and room rates in Q2 at record high
    * Genting, Las Vegas Sands' casinos in Singapore saw lower
Q2 gaming revenue


    By Charmian Kok
    SINGAPORE, Aug 10 (Reuters) - Genting Singapore,
which owns one of Singapore's two multibillion-dollar casino
complexes, posted lower quarterly core earnings that missed
expectations as gaming revenue fell and expenses rose.
    The Singapore casino operator's results miss came after
rival Las Vegas Sands, owned by billionaire Sheldon
Adelson, announced smaller-than-expected quarterly earnings in
July, hit by lower profits from the city-state and Macau.
 
    With gaming revenue in Singapore facing headwinds, analysts
say Genting's Malaysian parent Genting Berhad faces
increasing pressure to expand overseas. 
    In June, the gaming group applied to raise its stake in
casino operator Echo Entertainment to above 10 percent,
potentially pitting it in a $3 billion-plus takeover battle
against Australian billionaire James Packer. 
    Genting Singapore said on Friday its gaming revenue in
April-June dipped 4 percent from a year ago, as it earned
S$306.3 million ($246.25 million) before interest, tax,
depreciation and amortisation (EBITDA), or core earnings, down
from S$382.7 million a year earlier. 
    This was below an average estimate of S$361 million,
according to three analysts surveyed by Reuters. The company
derives most of its EBITDA from its Singapore casino Resorts
World Sentosa. 
    "Gaming revenue dipped slightly, but this was not unexpected
given the overall slowdown in business environment, even in
Macau," said Tan Hee Teck, Genting Singapore's president and
chief operating officer, according to briefing notes of an
analyst call seen by Reuters. 
    Genting Singapore's EBITDA was also lower than the $330.4
million reported by Singapore rival Marina Bay Sands, owned by 
Las Vegas Sands. However, adjusted property EBITDA at Sands'
Singapore complex plunged 75 percent from a year ago, as gaming
revenues fell 7.5 percent.
    
    NON-GAMING BUSINESS GAINS
    Marina Bay Sands and Resorts World are the world's second-
and third-most expensive casino complexes after MGM's CityCenter
in Las Vegas, and their profits and profit margins are among the
highest globally.
    Earlier, in an emailed statement, Genting Singapore said its
adjusted EBITDA was S$311 million. Genting Singapore's
second-quarter net profit fell 32 percent to S$165.5 million
from a year ago.
    Genting Singapore said its non-gaming business performed
well, with hotel occupancy and average room rates in the second
quarter at an all-time high of 92 percent and S$432,
respectively, boosted by more daily visitors at theme park
Universal Studios Singapore. 
    Genting Singapore shares have fallen about 15 percent so far
this year, underperforming the benchmark Straits Times Index's
 15 percent rise in the same period. 
    Genting Berhad now sits on more cash than any other gaming
operator in the world. Earlier this year, Genting Singapore
raised S$2.3 billion through perpetual securities, stoking
speculation it will embark on an acquisition spree.
 

    Q2 results for Singapore's two casino-resorts in U.S.
dollars:
                Resorts World Sentosa      Marina Bay Sands
 Net revenue    $564.5 mln                 $694.8 mln
 Adjusted       $250 mln                   $330.4 mln
 EBITDA                                    
 EBITDA margin  44.3 pct                   47.6 pct
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