Marina Bay Sands recovered in 1Q but what about Genting?
MBS' 1Q12 VIP volume recovered by 17% QoQ to SGD16.2b despite 1Q12 VIP win rate of 3.58% that was 24 bps higher QoQ.
According to MayBank KimEng, ceteris paribus, higher VIP win rates tends to reduce length of play and in turn, VIP volume.
What's the outlook for Genting Singapore?
Genting Singapore will release its 1Q12 results on 10 May and MayBank KimEng analyst Yin Shao Yang says that theyare encouraged by competitor Marina Bay Sands’ 1Q12 VIP volume recovery QoQ and are
optimistic that it will spill over to Resorts World Sentosa.
"We expect GENS to report 1Q12 EBITDA of SGD350m," says MayBank KimEng analyst Yin Shao Yang.
Here's more from MayBank KimEng:
Assuming that Resorts World Sentosa (RWS) still commands the 46% share of VIP volume from 4Q11, its 1Q12 VIP volume would have recovered to SGD13.9b.
That said, RWS’ share of VIP volume would have likely risen QoQ due to the opening of the 194-room Equarius Hotel and Beach Villas on 16 Feb, which nearly tripled its VIP room inventory.
1Q12 VIP volume of SGD13.9b will still be 25% lower YoY as RWS held a 59% share of the VIP volume in 1Q11. Assuming a theoretical VIP win rate of 2.85%, GENS should report 1Q12 EBITDA of SGD350m that would be 35% lower YoY because of potentially lower VIP volume YoY and lower VIP win rate YoY (1Q11: 3.8%). 1Q12 EBITDA of SGD350m would still be 14% lower QoQ despite potentially higher VIP volume QoQ due to lower VIP win rate QoQ (4Q11: 3.9%).