It’s not looking very good at Genting Singapore. After Genting reported a 91% year over year fall in earnings for Q2 back in August, this quarter’s year over year earnings came in 47% down. Just looking at those numbers can be depressing, but as often happens, breaking down the math reveals a different, more encouraging picture.

Before we get to that though, Genting Singapore’s recent decline does help confirm one thing. That is that the VIP segment is suffering everywhere, and not just in Macau. The VIPers are not simply moving from Macau to other venues, at least not yet. The VIP market is shrinking all throughout Asia. The bigger question is whether this is because they’re too afraid to gamble right now due to restrictions but will resume later, or whether the VIP gamblers as a class are shrinking. Either way, the cautionary tale here is that the VIP market is inherently unstable and long term, companies need to focus on mass market and treat VIP like a bonus. Much like top executive pay however, the big bucks usually come from the bonuses and not the base salary. Hard to escape this conundrum, really. It’s just a reality of the business.

In any case, the sky is not falling on Genting Singapore. Despite a further 47% fall in its bottom line this quarter, the numbers behind the numbers are not that bad. The absolute numbers are a profit of S$66.9M for Q3 2015 versus S$127.1M for Q3 2014, for an absolute difference of S$60.2M. The bad news is that revenue shrunk 5% year over year and the direct cost of sales increased despite those shrinking revenues. That means the cost of doing business is rising which is going to make growth harder going forward. The good news though is that this quarter included a S$53.7M higher year over year loss on derivative hedges and a S$52.7M higher loss on impairment of trade receivables. Together that accounts for a S$106.4M difference between this Q3 and last year’s Q3, while the absolute difference in earnings was only S$60.2M.

Genting Singapore’s loss on derivative hedging has to do with its attempts to protect its debt load with interest rate derivatives and those contracts expiring. In Genting’s words from the 2014 annual report: