Marina Bay Sands’ earnings slipped 6% in Q3 as VIPs vanish

The mass-market segment is also saturated.

Marina Bay Sands posted an unsurprising 6% drop in total earnings for the third quarter, on back of steadily weak VIP volumes.

According to UOB Kay Hian, MBS’ 3Q14 EBITDA came in at S$440m, which was largely attributed to an anaemic rolling chip volume of S$11,402m, representing a 12.7% quarter on quarter drop and a 33.8% year-on-year decline.

Besides poor volumes, MBS was also affected by a lower win rate of 2.64%, down from 2.85% in 3Q13. However, receivable provisions remain stable and management has cumulatively provided for up to 42% of its total receivables.

“As expected, MBS posted weak VIP volumes which we attribute to the softer macroeconomic conditions. The mass segment remained flattish due to market saturation. Despite cautious regional gaming sentiments, we expect Singapore’s GGR to remain resilient and thus maintain MARKET WEIGHT on the sector. We foresee modest impact from the potential slowdown in Chinese VIP arrivals due to their modest contributions to the casinos. For 2014, we forecast Singapore’s GGR to grow 3% on the back of win rate normalisation,” noted UOB Kay Hian.