Low-mass market segments could not sustain casino revenue growth...
Genting S’pore reports lower Q2 net profit
Extracts of CNA report
13 Aug 2011
SINGAPORE: Lower earnings from its Singapore casino resort pulled Genting Singapore’s second-quarter net profit down by 39 per cent to S$242.9 million.
This is a fall from S$396.5 million for the same quarter last year.
The company also registered a decrease of 17 per cent in revenue to S$728.7 million, compared to S$874.4 million year-on-year.
The gaming group, which operates Resorts World Sentosa, attributed the decrease to an unfavourable win percentage in the premium players business.
“Win percentage in the premium player market segment for second quarter of 2011 was significantly lower than the theoretical win and that of first quarter of 2011, pulling down both revenue and EBITDA numbers of the Singapore IR,” the integrated resort (IR) said in a statement issued Friday.
But it added it “was particularly excited about the jump in volume and earnings from the non gaming business”.
The average number of visitors to its Universal Studios Singapore (USS) daily grew to about 10,300 with an average spending of S$83 per visitor, a 40 per cent jump from the previous quarter.
Its hotel occupancy was 88 per cent with an average room rate of S$317.
Going forward, the IR said it will continue to build on its appeal with new attractions, including the Maritime Experiential Museum due to open in October, as well as the worldwide debut of the Transformers attraction in December.
Its hotel sector will be boosted with villas, more luxury rooms and larger suites.
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Final commentary from Professional Ground Expert Panel: –
“WE TOLD YOU! THIS LOW-MASS MARKET SEGMENT FROM MALAYSIA WOULD NOT BE ABLE TO SUSTAIN GENTING RWS CONTINUED GROWTH IN CASINO REVENUE. ”
AFTER MORE THAN ONE YEAR OF OPENING RWS @ SENTOSA, GENTING STARTS TO FACE HUGE UPHILL TASK IN DIRECT COMPETITION WITH MARINA BAY SANDS. THE FACT IS, MBS HAS ALREADY CANNIBALIZED THEIR MASS GAMING MARKET SHARE!”
LATEST INFORMATION IS THAT, FOR THE 2ND QUARTER, RWS HAD WITHDRAWN FROM “OVER-CREDIT” FOR PREMIUM VIP PLAYERS. THIS IS BECAUSE RWS COULD NOT SUSTAIN HEAVY CREDIT FOR THESE PLAYERS AND CONTINUE TO BUILD UP HIGH DEBT RATIO VS WAGER WIN %. SIMPLY, THE CREDIT RISK HAS OVER-GROWN TO BE UNSUSTAINABLE. BUT, INSTEAD RWS WOULD ONLY SAY THAT THEIR WIN % FOR VIP GAMING PORTION WAS (WELL) BELOW AVERAGE. CHURNING OF PREMIUM SEGMENT TURNOVER THROUGH OVER-CREDIT STRATEGY BACK-FIRE!
Professional Ground DECODER 