DJ MARKET TALK: Genting Singapore 2Q EBITDA Below Expectations

DJ MARKET TALK: Genting Singapore 2Q EBITDA Below Expectations

0032 GMT [Dow Jones] Genting Singapore (G13.SG) may come under pressure after its 2Q11 earnings fall below expectations; the casino operator posted revenue of S$728.7 million, down 21% on quarter, while EBITDA was S$347 million, down 34% on quarter, lower than the S$378 million tipped in a Dow Jones poll of seven analysts. Daiwa says the sequential falls in revenue and EBITDA were attributable to a lower win rate of 2.66% (vs 3.8% for 1Q11) and a 13% on-quarter drop in rolling-chips volume, while the volume for mass market and slots remained stable. It notes RWS saw its market share in gross gaming revenue decline to about 50% in 2Q11 (from 60% in 1Q11). "We see the market-share changes as unexciting for Genting." Morgan Stanley says while Genting's share of Singapore's gaming market fell, the whole market also declined; "Singapore GGR dropped by 5% on quarter to US$5.65 billion in 2Q11, a significant divergence from Macau." The house also remains concerned that Genting's growth is limited by capacity. Shares closed Friday +2.7% at S$1.725. (matthew.allen@dowjones.com)