Genting Bhd - GENS’ 4Q12 results in line

Period    4Q12 for Genting Singapore Plc. (GENS)

Actual vs.  Expectations  The FY12 adjusted EBITDA of SGD1.36b came in 5% above our estimates and 3% above that of the market consensus.

 The FY12 PAT of SGD677.7m was on the dot of the consensus estimate.

Dividends   A DPS of SGD0.01 was declared in 4Q12, which is the same payout as last year. 

Key Results Highlights  Sequentially, the 4Q12 PAT rose 17% to SGD162.2m from SGD138.4m as revenue grew 18% over the period. This was due to a better luck factor coupled with a strong non-gaming business with the launch of Marine Life Park (MLP), which opened in Nov 2012. 

 On a YoY comparison, the 4Q12 PAT plunged 36% from SGD254.6m in 4Q11 while the revenue only rose 1% from a year ago. The weaker YoY results were mainly due to the higher impairment loss on trade receivables, higher opex for the opening of MLP and the luck factor being better in 4Q11. At the adjusted EBITDA level, the earnings only declined by 7%.

 RWS reported improved luck at its VIP segment where its rolling chip-win improved to 3.0% in 4Q12 from 2.8% in the preceding quarter, but it was still lower if compared to 3.9% last year.  

 The daily average visit number to the theme park jumped to 11,100 in 4Q12 from 9,100 in 3Q12 and 10,300 in 4Q11, thanks largely to MLP where it reported a daily average visit number of 7,100 within a short period of 40 days. The ARPU remained unchanged QoQ at SGD86 in 4Q12, although it was higher from SGD83 last year. 

 The hotel occupancy rate dropped to 91% in 4Q12 due to new inventories coming on stream, i.e. from 93% in 3Q12 but was still higher compared to 88% reported in 4Q11. The average hotel room rate improved to SGD447 in 4Q12 from SGD432 in 3Q12 and SGD317 in 4Q11.

Outlook   Management has now guided for optimistic prospects for both its gaming and non-gaming businesses as compared to three months ago when they were much more cautious.

Change to Forecasts   No changes to our FY13-FY14 EBITDA estimates for GENS. 

Rating   NOT RATED for GENS, MARKET PERFORM for GENTING.

Valuation    We are keeping our TP on GENTING unchanged at RM9.59/share, based on a 20% discount to its SOP, ahead of its results to be released next Thursday (28 Feb).

Risks   Risks to GENS include weaker than expected business volume and luck factor.  

Source: Kenanga