Marina Bay Sands' mass-market volumes to shrink 5-8%

Someone's getting a little unlucky.

According to UOB Kay Hian, Las Vegas Sands’s (LVS) 4Q12 report card revealed that Marina Bay Sands’s (MBS) rolling chip volume (RCV) rebounded sharply in 4Q12, growing 45% yoy and 37% qoq to S$20.1b.

However, LVS continues to be cautious on the outlook of RCV trends, noting that MBS continues to rely on a concentrated pool of VIP players.

Gross gaming revenues (GGR) and EBITDA remain depressed. Overall, MBS delivered an adjusted EBITDA of S$369.9m (+13.7% qoq, -32.7% yoy).

Here's more from UOB Kay Hian:

MBS saw its VIP GGR contract 7% yoy to S$430.9m as the RCV win was lower at 2.14% (4Q11: 3.34%, 3Q12: 1.79%). On a notional hold-adjusted basis, 4Q12 EBITDA would have been up 6.9% yoy to US$406.4m (about S$499m).

Mass-market segment could be the key disappointment in 2013. MBS’s non-RCV to drop by 3.9% qoq and 8.1% yoy respectively to S$1.36b, indicating that the mass-market segment continued to contract for the second consecutive quarter, which we attribute to falling local patronage.

The qoq decline in non-RCV in the historically seasonally strong 4Q (+0.1% qoq in 4Q11, +1.5% qoq in 4Q10) suggests that mass-market volumes could contract by 5-8% in 2013, although we note LVS’s comment that the daily mass-market GGR has rebounded from the low.

The impact on casino operators’ EBITDA would be more significant, as the mass-market segment generally accounts for about two-thirds of the gaming sector’s gaming EBITDA.

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