Top Story : Genting Singapore – Exceeding consensus expectations Outperform
1QFY10 Results/Briefing Note - Genting Singapore’s (GS) 1QFY10 core net profit of S$81.8m was in line with our forecasts, comprising 25.7% of our full year core net profit, but above consensus, comprising 36.4% of FY10 net profit. GS recorded an EI loss of S$452.6m, mainly for an impairment loss on its UK intangible assets.
♦ The yoy increase in revenue was due to commendable revenue contribution from RWS, the bulk of which came from the casino, while GS’ UK also recorded a 19% yoy rise in revenue coming from improved luck factor. Although the EBITDA margin for RWS of 32.5% seems lower than our projected 36.8% for FY10, we note that RWS recorded some preoperating expenses in 1Q10. Assuming a conservative S$50m of preoperating expenses were incurred and adding this back to RWS’ EBITDA for 1Q, this would bring EBITDA margins to about 47.6%, much higher than our projection.
♦ Conference call highlights:
(1) Visitor arrivals meeting RWS’ management expectations;
(2) Update on casino operations; and
(3) Update on capacity expansion plans.
♦ No change to forecasts although there could be a rash of upgrades to consensus projections following these results. We maintain our Outperform call on GS and fair value of S$1.35, based on blended average of EV/EBITDA (in line with 12x FY11 regional average) and DCF.
RHB Equity 360°(Genting S’pore, Banks, Sime Darby, WCT, Maybank, Sunrise, Cuscapi; Technical: BCorp) -14/05...
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