Genting Singapore's profits crash 44% to S$115.9m

Chips are down in China.

According to OCBC Investment Research, Genting Singapore (GS) reported 1Q13 revenue of S$669.6m, down 15% YoY and also 16% QoQ, hit by much weaker win percentage (2.12% versus 2.85% theoretical) in the premium players’ business despite a significant increase in the premium players’ rolling volume. Net profit also posted a decline of 44% YoY and 13% QoQ to S$115.9m. 

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Adjusted EBITDA slipped 35% YoY and 32% QoQ to S$255.4m; adjusted EBITDA margin slipped to 37.3% from 46.6% in 4Q12. All in, a pretty muted set of numbers, as top-line only met 20% of our original FY13 forecast while bottom-line met 18% of our full-year number.

Recall that management sounded more cautiously optimistic during its 4Q12 results briefing, and justifiably so with RWS recording its highest rolling-chip volume in 1Q13. But GS has now turned more cautious for the rest of the year, citing a more uncertain global economic outlook, especially with the recent muted economic data coming out of China.

Management adds that it will adopt a more cautious approach for its credit policy towards VIP players, where the bulk probably still comes from mainland China. Nevertheless, GS intends to continue to work towards growing its premium mass market business by targeting those who are within a four-hour flight from Singapore.