Sands China Falls on Second-Quarter Profit Drop: Hong Kong Mover
Sands China Ltd. (1928), the Hong Kong- listed unit of billionaire Sheldon Adelson’s Las Vegas company, fell to the lowest level in seven months after it reported a 40 percent drop in second-quarter profit.
The stock fell 5 percent to close at HK$21.15 in Hong Kong trading. The benchmark Hang Seng Index gained 0.08 percent.
Net income dropped to $160.5 million from $267.4 million a year earlier on an impairment charge, lower winnings and opening costs, according to a Las Vegas Sands Corp. (LVS)’s filing prepared in U.S. GAAP standard. Growth is slowing in Macau, the world’s largest gaming hub, as high-stake gamblers cut back spending amid a weaker Chinese economy. Wynn Macau Ltd. this month reported a drop in revenue for the second quarter.
Sands China booked an exceptional loss of $100.8 million for the capital it spent on two plots of land in Macau. Officials in the territory, the only place where casinos are legal in China, in 2010 rejected the casino operator’s application to develop the plots and the company last month withdrew its appeal of that decision.
Revenue increased to $1.48 billion from $1.21 billion a year earlier, according to the filing. Sands China opened the first phase of its Cotai Central resort in April.
Gambling revenue in Macau rose 7.3 percent in May, the weakest pace since July 2009. While it increased 12.2 percent in June to 23.3 billion patacas ($2.9 billion), it still lagged the 15.3 percent median estimate of four analysts surveyed by Bloomberg News.
Sands China last week was given a three-year extension to build its fifth property in Macau after Sands Macau, The Venetian Macau, The Four Seasons Hotel Macau and Sands Cotai Central. The company will pay a penalty of 900,000 patacas for the delay in developing a plot called Parcel 3, where it will build the newest resort.
Sands China plans to begin construction on Parcel 3 by November, and the new project will target the mass-market and feature “family-oriented” facilities, according to a press statement.
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