The group's full-year FY11 results were in line with ourestimates but marginally beat consensus numbers by 8%. Despite the recentsetback in Miami and depletion of the group's net cash balance to just RM343mas at Dec 2011, its free cash flow remains robust at RM1.2bn p.a, underpinningits capacity for future acquisitions. The maiden full-year contribution fromRWNY to earnings in FY12 is expected to drive group earnings by 19.6%. MaintainBUY, and at a fair value of RM4.32, backed by itsalluring 8.1x EV/EBITDA.
In line.Adjusting for various exceptional items, the group's FY11 core earnings were inline with our estimates, with its full-year core FY11 earnings representing102.1% of our full-year forecast but a larger 108% of consensus. EBITDA and netprofit expanded 15.1% and 11.2% respectively on better hold rates at itsdomestic VIP gaming business and maidencontribution from its UK business. On a q-o-q comparison, EBITDA contracted1.9% q-o-q, largely owing to a RM40.9m construction loss from cost overruns fromthe development of Resort World at New York (RWNY) which it incurred in 4Q11. Excludingthe construction loss, the group's core operations reported a 5.7% q-o-q increasein EBITDA, driven by the higher business volume from Malaysia and a maiden RM23.6mcontribution from RWNY, which commenced operation on 28 Oct 2011. Meanwhile,casino visitation in UK stood at +5% in London and +9% atprovincial casinos.
Malaysian casino opresilient. Its Malaysian casino operation, which comprises the bulk of group earnings (at 90%), reported 7% y-o-y and +6% y-o-ygrowth in revenue and earnings respectively, although 4Q11 revenue contracted1% q-o-q on the back of a lower winpercentage. Foreign visitor growth was driven by Singapore and Indonesia, fromwhich visitation was higher by 6% and 8% respectively for the FY11 perioddespite fierce competition from the operation ramp-up by Singapore's integratedresorts. More importantly, hotel arrivals from Singapore were higher than thepre-Singapore IR levels as Genting Highlands' lower price points and coolmountain air continue to be a key draw for mass market visitation.