How Singapore's anti-money laundering rules may knock out Genting

Weaker results in 2H13 loom.

According to Phillip Securities, while VIP rolling volumes were at a record high, with growth mostly from new customers, management warned of uncertainties in China and Malaysia, and a weaker Singapore outlook for the next two quarters. 

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Economic data from China has pointed to a muted growth outlook, while Singapore’s focus on Anti Money Laundering regulations may reduce the number of customers. Elections in Malaysia also provide some uncertainty, while Singapore’s tight labor market may lower income generation, and service standards. GENS guide that they are seeking another Asian leisure centre, to leverage on their team of capable and experienced management.

A major focus for GENS includes Japan and two other areas. GENS is optimistic that Japan will allow the opening of casinos within 12 months.

Genting Singapore (GENS) reported net profit attributable to shareholders of S$115.9 million, decreasing 43.6% y-y, and 13% q-q. EBITDA of S$290.5 million was lower 20.3% y-y, and 12.7% q-q.

Revenue was also lower due to lower gaming revenue. While VIP rolling volumes were at a record high, much lower win rates of 2.12% led to lower revenue.