Resorts World Sentosa profit falls, allowing Las Vegas Strip to retain 2nd place

genting-singapore-las-vegasGenting Singapore, the Malaysian outfit which operates the Resorts World Sentosa (RWS) integrated resort casino in the famous city-state, reported a profit of S162.2m (US $131.1m) in Q4 2012. That’s 38% below the same period a year earlier, a shortfall the company blamed on one-off property expansion expenses. Earnings fell a more reasonable 6.4% to S369.3m. Revenues rose slightly from S792m from S786.3m, although gaming revenue slipped 2.7% to S627m. Regardless, analysts had expected worse, and Genting Singapore’s stock rose 3% on Friday.

The amount wagered at RWS’ VIP gaming tables increased by 56% to around S18b, but this was offset by a decreased win rate. Union Gaming Research Macau (UGRM) issued a note to investors saying Genting management was “notably bullish” about its VIP business, believing the Chinese VIP market – which accounts for half of RWS’ VIP revenue – to be “particularly healthy.” The amount of credit RWS was willing to extend VIPs was also on the up, with receivables rising 33% year-on-year to S960m. Other analysts suggest this generosity could come back to haunt RWS via gamblers defaulting on their loans, but UGRM is nonetheless forecasting 10% growth in RWS’ VIP sector in 2013. The company’s cash holdings rose by a third to S4.4b, suggesting acquisitions may be in the cards for 2013.

Full-year revenues at RWS came to $2.91b. Combined with the $2.94b earned last year by Singapore’s other IR, Las Vegas SandsMarina Bay Sands, Singapore’s total gaming revenue rose 8% to $5.85b in 2012. That narrowly preserves the Las Vegas Strip’s status as the world’s #2 casino hub, although the Strip’s $6.2b take in 2012 pales in comparison to the $38b Macau raked in last year. Union Gaming Group’s Grant Govertsen said he expects Singapore’s gross gaming revenue to grow “in the low or mid-single digit range” this year, which should allow the Strip to retain its #2 rank in 2013.

In case you missed it, the UK regulatory approval last week of Rank Group’s acquisition of 19 Gala casinos means the UK’s two largest casino groups are now run by Malaysian companies. Rank was acquired by the Guoco Group in 2011 and Genting acquired its 46 UK casino properties the previous year. Interestingly enough, Global Betting & Gaming Consultants (GBGC) recently released a ranking of the top-20 public gaming companies based on market capitalization and determined the top-10 had one thing in common besides gaming: they all had strong Asian ties. Further proof that, while the gaming world is undergoing an eastward tilt, eastern influence is also creeping westward.