Profit rebound for MBS in 3rd quarter

Marina Bay Sands' revenue in the third quarter was buoyed by more gamblers from Indonesia and Malaysia, who also stayed overnight.
Marina Bay Sands' revenue in the third quarter was buoyed by more gamblers from Indonesia and Malaysia, who also stayed overnight.ST PHOTO: KUA CHEE SIONG

Daily mass market and non-gaming segments show growth even as VIP gaming revenue falls

More gamblers from Malaysia and Indonesia and overnight stays helped Marina Bay Sands (MBS) bounce back from a dismal second quarter. The better numbers came largely from higher daily mass market and non-gaming segments while VIP gaming turnover stayed weak.

The end result was a net profit of US$390.7 million (S$541.2 million) for the three months to Sept 30, up 0.3 per cent from the US$389.7 million recorded in the second quarter.

Revenue rose 1.6 per cent to US$762.6 million, helped by a 1.1 per cent increase in gaming turnover to US$591.4 million. The total mass revenue per day was US$4.8 million, compared with US$4.5 million in the second quarter.

Mr Robert Goldstein, president and chief operating officer of parent firm Las Vegas Sands (LVS), said yesterday: "We had a weak last quarter in that most critical segment, the slot ETG (electronic table games) segment. We're very happy to see a return to what's been the status quo for a couple of years at US$4.8-plus million a day.

"We saw more activity on the floor - mostly foreign. We had more overnight stays from Indonesia, Malaysia driving that, (which was) really encouraging because... that is the segment that drives MBS. I think the aberration of the second quarter is behind us."

Rival Genting Singapore also saw improved third-quarter earnings. Its net profit rocketed 187.2 per cent to $106.9 million as its conservative credit extension policy to high rollers paid off.

  • AT A GLANCE

  • Marina Bay Sands

    REVENUE: US$762.6 million (+1.6%)

    NET PROFIT: US$390.7 million (+0.3%)

    DIVIDEND: N.A.


    Genting Singapore

    REVENUE: S$581.5 million (-9%)

    NET PROFIT: S$106.9 million (+187.2%)

    DIVIDEND: 1.5 cents per share

But this took a toll on revenue, which dropped 9 per cent to $581.5 million from a year earlier. Total gaming revenue at Resorts World Sentosa fell 10 per cent to $407.4 million while non-gaming revenue slid 6 per cent to $173.3 million.

Likewise, MBS' VIP gaming revenue, which accounted for 42 per cent of the total gaming turnover, fell 36.5 per cent to US$7.26 billion.

DBS Group Equity Research noted: "With the Chinese government embarking on an anti-corruption and austerity drive, VIP players have generally shunned casinos across Asia to avoid the scrutiny of government officials. This resulted in VIP gross gaming revenue in Macau and Singapore falling 40 per cent and 34 per cent last year respectively.

"For Genting Singapore, in combination with its greater focus on credit quality, its VIP gaming revenues fell 49 per cent year on year, leading to its market share declining from the mid-50s in 2014 to a low 40 per cent last year."

MBS' mass table revenue, which accounted for 38 per cent of the total gaming turnover, fell 8.1 per cent to US$985 million.

But slot machines, which have a greater patronisation rate by local players than mass or VIP tables, fared slightly better. Slots, which accounted for around 20 per cent of the total gaming revenue, gained 1.4 per cent to US$3.46 billion in the third quarter.

Unlike Genting, revenue in MBS' non-gaming segments grew for the quarter. Hotel room turnover jumped 10.4 per cent to US$109 million, while food and beverage sales rose 5.7 per cent to US$54 million. Mall turnover rose 1.9 per cent to US$42.3 million.

The average daily room rate rose from US$432 in the third quarter last year to US$475, which group chairman Sheldon Adelson said was an all-time record for the hotel. Hotel occupancy rose to 98.3 per cent in the third quarter, resulting in revenue per available room jumping from US$423 a year ago to US$467.

"Our retail mall continued to outperform the Singapore market, with tenant sales per square foot for the year ended Sept 30 of US$1,400," Mr Adelson said.

Meanwhile, LVS reported a net income of US$605.5 million, down 2.1 per cent from US$618.2 million a year earlier. Revenue gained 2.6 per cent to US$2.97 billion.

A version of this article appeared in the print edition of The Straits Times on November 05, 2016, with the headline 'Profit rebound for MBS in 3rd quarter'. Print Edition | Subscribe