Period 2Q12
Actual vs. Expectations
The 2Q12 core profit
of RM497.8m came in within expectations.
This brought 1H12
core profit to RM815.8m, which accounted for 53% of our FY12 full-year estimate
and 51% of the market consensus.
Dividends A 3.8
sen GDPS was declared in 2Q12, the same as that of last year.
Key Results Highlights
The 2Q12 headline net
profit leapt 83% QoQ to RM495.8m, on a broad base improvement in its casino
operations, with revenue rising 11%. YoY, net profit expanded 58% while revenue
gained 38%.
The home turf casino
operations reported an adjusted EBTDA which grew 21% QoQ in 2Q12 on a 7% hike
in revenue. This was due to a higher hold percentage despite a lower business volume
in the VIP market. YoY, its Malaysian casino posted an adjusted EBTDA that rose
8% while revenue increased 5%.
UK casinos reported
strong numbers, especially the London casinos. The 2Q12 adjusted EBITDA jumped
to RM130.1m from RM34.5m in 1Q12 on higher business volume as revenue rose 38%.
YoY, it turned profitable from the negative adjusted EBITDA of RM7.8m in 2Q11
while revenue surged 153% YoY.
USA operations
achieved good results as its adjusted EBITDA soared to RM60.7m in 2Q12 from
RM1.7m in 1Q12 despite revenue dropping slightly by 1%. YoY, the adjusted
EBITDA doubled from 2Q11 although its revenue dipped 40% as 2Q11 results
included a RM363.1m construction revenue.
Outlook FY12
will be a stronger year than FY11 as RWG’s earnings continue to be resilient
with a recovery of its UK operations on hand as well as it getting a full year
earnings contribution from RWNYC.
Change to Forecasts
No changes to our
FY12-FY14 estimates
Rating MAINTAIN OUTPERFORM
Valuation We
reiterate our price target of RM4.18/SOP share.
Risks Unfavourable luck factor.
Source: Kenanga
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