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GENS results poor but analysts still positive


 

Maybank Kim Eng research said Genting Singapore’s 15Q2 results missed estimates due to low VIP hold rate, adding that hold adjusted results would have been in line.  

GENS reported net loss of SGD16.9 million ($12 million) was due to derivative and forex losses of SGD95 million and SGD84 million respectively, said Maybank analyst Samuel Yin Shao Yang.

RWS’s revenue amounted to $577.8 million, a drop of 23 percent year-on-year.

“Excluding the exceptional losses, 2Q15 core net profit of SGD68.9m was still below due to a below-theoretical VIP hold rate of 2.1%.”

The company’s results would have been in line if the VIP hold rate had been a normal 2.85 percent.

“As such, we cut FY15 core earnings by 20% only to account for a full-year below-theoretical VIP hold rate of 2.60% (2.85% previously). We trim FY16-17 core earnings by only 2% for housekeeping changes.”

Bernstein Research analyst Vitaly Umansky said “we would characterize Q2 as "in-line". “Extraordinary poor VIP hold resulted in weak EBITDA; however, on a hold-adjusted basis, EBITDA would have met our expectations.”

 

“We continue to have conviction in the company's ability to generate strong cash flows even under tough market conditions. However, we would like to see the company become more aggressive in its stock buyback program, especially at current price levels.”

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