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Genting S’pore gets a billion reasons to smile

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13 Aug 2010

The numbers are startling and the contrast with last year even more so. Genting Singapore (GENS) has raked in almost S$1 billion in revenue for the second quarter with net profit coming in at close to S$400 million.

For the quarter ended June 30 – the first full quarter with Resorts World Sentosa (RWS) contributing to the bottom line – GENS reported revenue of S$979 million, up from just S$120 million a year ago.

Net profit in the quarter also increased significantly to S$397 million, up from a loss of S$50.7 million a year ago. These numbers simply flew past market expectations.

GENS said that RWS alone recorded revenue of S$860.8 million in Q2. It added that earnings before interest, taxes, depreciation and amortisation (Ebitda) of S$503.5 million for the quarter represented an Ebitda margin of 58 per cent, ‘at the back of higher than industry average win percentage in the premium players market’.

At its Universal Studios Singapore, daily maximum capacity has increased to about 8,000 with an average visitor spend of S$84 while hotel occupancy at RWS was 70 per cent with an average room rate of S$263.

The number of foreigners visiting RWS also appears to be increasing. Previously, analysts had estimated that Singaporeans made up about 40 per cent of the visitors to the RWS casino. In a press statement released yesterday, GENS president and chief operating officer Tan Hee Teck said the results were ‘powered by overseas arrivals’.

He said: ‘The Singapore Tourism Board (STB) has been doing a good job and the whole tourism industry has been on a buoyant spin. Two-thirds of the visitors to the casino, for example, come from overseas. Many of them include Universal Studios Singapore and Voyage de la Vie (RWS’s resident theatre show) in their itineraries.’

OCBC Investment Research analyst Carey Wong said that GENS’ performance was ‘a lot stronger than expected on the topline’.

‘It suggests that the Singapore market is a lot bigger than what people were expecting,’ he added.

Mr Wong also noted that the opening of Marina Bay Sands (MBS) in the quarter did little to cannibalise customers. ‘Let’s be honest – within such a small place, gamers tend to flit from one to the other. Hence cooperative competition is benefiting both,’ he said.

Vincent Khoo, UOB Kay Hian’s head of research for Malaysia, was also pleasantly surprised by GENS’ performance, describing it as ‘astoundingly strong’.

Indeed, GENS Q2 performance seems to put it on track to hit more bullish full-year earnings targets.

While there has been no consensus on how well Singapore’s nascent gaming market will perform, bullish estimates for total gaming revenue for both RWS and MBS combined have been around US$3 billion, suggesting that both casinos register combined daily gaming revenue of S$11-12 million.

A DBS Vickers report released this week estimated that MBS’s first 65 days of operations saw daily gross win of US$4 million while RWS saw US$4.9 million daily for its first 45 days.

GENS did not reveal its gaming revenue for the quarter. However, based on RWS’s total revenue of S$860.8 million for Q2, average daily revenue works out to about S$9.45 million.

GENS’ UK casino operations registered revenue of S$104.9 million for the quarter, a decrease of 3 per cent year-on-year while Ebitda fell 25 per cent to S$9.1 million.

In July, GENS announced that it was seeking to divest its UK operations.

Earnings per share for the six months ended June 30 was nil compared to a loss of 0.8 cent in the corresponding period a year ago.

At the close of the trading day yesterday, GENS’ share price was up one cent to $1.28 per share.

More information….

Singapore Hot Stock-Genting S’pore up 1.7 pct in heavy trade

Reuters – Friday, July 2

SINGAPORE – Shares of Genting Singapore <GENS.SI> rose as much as 1.7 percent in heavy trading on Friday, after it said it will sell its UK casino operations to parent Genting Malaysia <GENM.KL> for 340 million pounds .

Around 0116 GMT, it was the most actively traded stock on the Singapore stock exchange, with over 24.6 million shares changing hands.

“We may actually see Genting Singapore posting a positive bottom-line after the sale, as we believe that its UK operations will still be loss-making this year,” OCBC said in a report.

Genting Singapore will receive net proceeds of around S$688.8 million and will book an excess over book value of around S$103.6 million, OCBC added.

Genting seeks US casino investments

Monday, June 14, 2010 – BT

Genting Malaysia Bhd, the casino owner that parlayed a single hilltop site near Kuala Lumpur into gambling resorts in Singapore, the Philippines and the UK, is now looking for investments in the US.

“Genting Malaysia is aggressively searching for opportunities to invest in the US casino gaming market,” Justin Leong, head of strategic investments and corporate affairs at group parent Genting Bhd, said in an interview in New York. “Our strategy is building a US presence.”

Armed with US$1.7 billion in cash and debt free, Genting Malaysia is seeking acquisitions, new markets and potentially a strategic partnership in the US, Leong said. The Kuala Lumpur- based company, which said this month it may bid to develop a slots casino at Aqueduct Racetrack in New York City, first invested in the US sector last year, buying MGM Mirage bonds.

“It’s unlikely to be a single asset,” Leong said. “If we were to acquire something, it’s more likely to be a portfolio of assets or a substantial stake in a company.”

 

Genting Malaysia is also looking at developments and new gambling jurisdictions opening in the US, Leong said.

The company bought MGM Mirage’s secured bonds in May 2009 when the Las Vegas Strip’s biggest casino owner raised cash to avoid a potential bankruptcy. Genting Malaysia has invested in every capital issue by Las Vegas-based MGM since, Leong said.

“Genting Malaysia’s first foray into the US casino market was investing in MGM, and that strategic relationship continues,” said Leong, 32. The bid for Aqueduct “is another step.”

Kerkorian’s Stake

The investments include US$100 million of bonds secured by MGM’s Bellagio and Mirage properties in Las Vegas, 9 per cent notes tied to MGM Grand and MGM Mirage’s recently issued convertible senior notes.

Kirk Kerkorian, who founded MGM Mirage and is its biggest shareholder, said in October that his Tracinda Corp. is exploring “strategic alternatives” for its 37 per cent stake. The investor, 93, said in regulatory filings that MGM Mirage is undervalued and he is open to proposals.

Leong wouldn’t elaborate on Genting’s interest or say whether there have been talks with Kerkorian, whose stake in MGM Mirage is valued at US$1.9 billion. The shares rose 14 cents to US$11.60 on June 11 in New York Stock Exchange composite trading and have gained 27 per cent this year.

Winnie Lerner, an outside spokeswoman for Tracinda, and Alan Feldman, a spokesman for MGM Mirage, declined to comment.

MGM Mirage and partner Pansy Ho hold one of the six casino licenses in Macau, the southern Chinese city that is the world’s largest gambling hub. Ho is the daughter of Macau casino billionaire Stanley Ho.

‘Faster, Sooner’

Revenue from the Malaysian casino, a gambling monopoly held for almost four decades, helped build the Genting Bhd empire that includes hotels, Star Cruises and Norwegian Cruise Lines, power generators and palm oil plantations.

In February, a Genting affiliate opened Singapore’s first casino, a US$4.7 billion resort with a Universal Studios theme park, adding to the group’s Resorts World casinos in Malaysia’s highlands and the Philippines capital of Manila.

Genting also is the biggest casino owner in the UK, operating under the Circus, Maxims and Mint brands.

There is competition for deals in Las Vegas as the city recovers from its worst economic slump on record. Hedge fund billionaire John Paulson is acquiring a 9.9 per cent stake in Harrah’s Entertainment Inc. In May, his New York-based Paulson & Co said it owned 9.1 per cent of MGM Mirage and 4.6 per cent of Boyd Gaming Corp.

Genting Malaysia has held investment talks with large US casino companies since December 2008, Leong said, declining to specify them.

“I wish I had worked faster and done something sooner,” Leong said.

Leong, a nephew of Genting chairman and chief executive officer Lim Kok Thay and grandson of founder Lim Goh Tong, joined the family company in September 2004 after about four years at Goldman Sachs Group Inc.

Aqueduct Auction

Genting is one of six potential bidders vying to renovate Aqueduct Racetrack and operate a slot machine-style “racino” with 4,500 video-lottery terminals in Queens. The latest round of proposals, which require a minimum US$300 million up front, are due June 29.

The family’s closely held Kien Huat Realty previously invested in three U.S. casino ventures, and last month partnered with the Mashpee Wampanoag Tribe to finance a proposed casino resort in Massachusetts.

In the early 1990s, Kien Huat financed the Foxwoods Resort & Casino in Connecticut, whose tribal owners defaulted on about US$2.5 billion of debt last year, and the Seneca Niagara Casino in New York.

In August, Kien Huat paid US$55 million for 50 per cent of Empire Resorts Inc, owner of the Monticello Casino & Raceway in Monticello, New York, helping Empire to restructure some debt. — Bloomberg

Two Integrated Resorts are Major Boost to Singapore’s Economy

singapore first casino

1 May 2010, CNA

SINGAPORE: Singapore’s two integrated resorts are a major boost to the country’s economy, said Prime Minister Lee Hsien Loong.

Speaking in Mandarin at the May Day Rally, Mr Lee told his audience of some 1400 unionists, employers, ministers and MPs that he and his grassroots leaders visited Resorts World Sentosa a few days ago.

They visited the Universal Studios, a family attraction and met many families having a good time.

Mr Lee said he and his group also paid S$100 each to look around the casino.

But they did not lose any money because they did not gamble.

The Prime Minister said he is glad that visitors are generally happy with the IRs as such attractions make the economy more vibrant and the city more colourful.

He also noted that the conference facilities at Marina Bay Sands opened several days ago and the first major event, a lawyers’ conference will be held tomorrow and will be attended by Minister Mentor Lee Kuan Yew.

He added that the IRs have created buzz and both were packed with visitors on their opening days, creating many jobs in the hospitality and tourism sector.

According to media reports, nearly 200 busloads of Malaysian tourists a day are visiting the IRs.

Mr Lee added that the Singapore economy has rebounded strongly for several reasons.

He said the country has responded decisively to tackle the challenges.

And secondly, Singapore’s long term plans have taken effect, like the integrated resorts which were the result of decisions made 5 years ago.

He said they moderated the economic decline and created many job opportunities.

Sand’s puts US$5.5b bet on Singapore

Genting Singapore falls to 7-week low

Genting Singapore Plc, operator of the first casino resort in the city-state, dropped to its lowest level in seven weeks on concern visitor numbers will drop once a second casino resort opens next week.

“Competition won’t be good for the stock,” Wai Kee Choong, an analyst at Nomura Holdings Inc in Kuala Lumpur, said by phone.

Genting dropped 1.2 per cent to 86 Singapore cents as 11:47 am in Singapore, heading for its lowest closing level since March 4. — Bloomberg

Read more: Genting Singapore falls to 7-week low http://www.btimes.com.my/articles/20100422115259/Article/#ixzz0lzwZOojt

Universal Studios Singapore courts 8 for lucky launch

Universal Studios Singapore

Reuters – Thursday, March 18

By Nopporn Wong-Anan SINGAPORE, March 18 – The world’s fourth Universal Studios welcomed its first visitors on Thursday with a lavish ceremony aimed at attracting luck, and repeat business, to the Singapore theme park which hopes to avoid the fate of loss-making Hong Kong Disneyland.

Doors were flung open to the public at precisely 08:28 a.m. on March 18, after 18 Chinese lions blazed through the entrance at 08:08 a.m, as the number 8 is considered by many in mostly ethnic Chinese Singapore as auspicious.

Actresses dressed up like Marilyn Monroe and Betty Boop paraded with the lion-dancing troupe along Hollywood Boulevard, one of the seven themed zones in the 20-hectare park that aims to attract 4.5 million visitors in its first year.

“We have ambitions that this would be the No. 1 destination in Asia and also Europe as far as theme parks are concerned,” Genting Group chairman Lim Kok Tuay told reporters after the opening ceremony.

Asked if Universal Studios Singapore could lose its novelty quickly and suffer losses like Hong Kong’s Disneyland, Lim said: “Definitely not, we are different from Disney.”

He adding the park would bring in more rides over the next three years to keep the experience “fresh” for visitors.

Since opening to fanfare in 2005, Disney’s first magic kingdom in China struggled to attract the expected flood of visitors from mainland China, and has been criticised as being too small to attract repeat visitors.

In 2008, it made a net loss of $170 million and is now undergoing an expansion aimed at bolstering its competitiveness with a rival Disneyland scheduled to open in Shanghai in the next five or six years. [ID:nTOE60I055]

The 24 attractions at Universal Studios include the world’s tallest duelling rollercoaster — where two rollercoasters shoot off at the same time and loop around each other — plus a 4-D cinema and rides based on Hollywood films such as “Madagascar” and “Jurassic Park”.

“It is surprisingly nice,” said Vijay, an Indian Singaporean visiting with his two kids, and wearing a Florida Universal Studios t-shirt. “The environment, the crowd and the merchandise is on par with Florida.”

“In the Singapore context, this service is very good. There are always common complaints in Singapore about lousy, rock bottom service, but these people make a difference,” said Vijay, who declined to give his full name.

The park is part of the $4.4 billion Resorts World at Sentosa, owned by a unit of Malaysia’s Genting Group, which also has a casino and six hotels, and plans to lure 60 percent visitors from Southeast Asia, China and India.

The Singapore government expects visitor arrivals to the city-state to rise by as much as 30 percent to 12.5 million this year, helped by an economic recovery in Asia and the lure of two new multi-billion dollar casino resorts.

Genting falls on visitor woes

SINGAPORE, 19 Feb (Straits Times): GENTING Singapore Plc, owner of Singapore’s first casino Resorts World Sentosa, fell for a fourth day amid concern the venture may draw fewer visitors than forecast, Bloomberg news reported on Friday.

The stock lost 1.1 per cent to $0.94 as of 2.05pm local time, down 11 per cent since RWS integrated resort opened on Feb 14. Genting has slumped 28 per cent this year, the worst performance on the benchmark Straits Times Index, which has retreated 5.6 per cent.

Genting ended 2009 at a record-high of $1.30 as investors anticipated a boost in revenue from starting up Singapore’s first IR. The $6.6 billion venture had 60,000 patrons in the first three days, Mr Robin Goh, a Resorts World spokesman, said in an e-mailed statement on Friday.

‘Expectations are in our view unrealistically bullish for a virgin casino market,’ Dominic Noel-Johnson, a Hong Kong-based analyst at Citigroup Inc told Bloomberg news. ‘While a few days don’t constitute a trend, initial visitors to the Singapore casino are significantly below our estimates.’

The facility needs 34,000 visitors each spending at least US$100 a day to meet Noel-Johnson’s ‘below consensus estimates’, he said. Citigroup rates Genting Singapore ‘sell.’

Mr Goh said ‘we remain confident’ Resorts World will attract 13 million visitors in the first year of operations for the entire resort, reiterating the target announced by Chief Executive Officer Tan Hee Teck on Feb 14.

Genting’s only domestic rival, Las Vegas Sands Corp’s Marina Bay Sands resort, is set to open in late April.

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