Lady Luck frowns on Singapore as recovery is unlikely

VIP and mass segment gaming volumes still dropped yoy.

Despite Marina Bay Sands (MBS)' qoq growth, gaming volumes could be seasonally stronger and hence it is still too early to be sure of a firm recovery, given the fragile macro environment, said UOBKayHian.

Las Vegas Sands announced MBS' 3Q16 results for its Singapore operating segment. Volumes at both the VIP and mass segments improved qoq (seasonally stronger due to the F1 event) but still dropped yoy.

Core adjusted EBITDA came in at US$391m, up 0.3% yoy. On a constant currency basis (ie in Singapore dollars), core adjusted EBITDA dipped 0.2% yoy due to better win rates for both the mass and VIP segments.

Hold-normalised adjusted property EBITDA at constant currency basis dropped 11.0% yoy, affected by weak VIP and mass gaming volumes.

Mass-to-VIP gross gaming revenue (GGR) mix for tables (excluding slots) was 55%:45% (3Q15: 49%:51%).

"We view that Singapore is experiencing a cycle that differs from Macau's, and is unlikely to show a meaningful yoy mass market recovery in the upcoming quarters, unlike Macau, it said.

The research house expects the industry to see flat gaming volume in 2017 despite 2016's low base.

Genting Singapore (GENS) also announced its 3Q16 results. Unlike MBS, Resorts World Sentosa's (RWS) mass and VIP gaming volumes were weaker qoq, down by low single digits and mid teens respectively.

UOBKayHian notes that for RWS, it expects the lower provisions and higher cost efficiency to still lead to EBITDA growth in 2017.

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