Sands China Ltd., the Asian unit of billionaire Sheldon Adelson’s Las Vegas company, fell the most in more than two weeks in Hong Kong trading after first-quarter earnings missed market expectations.
The stock dropped 2.4 percent to HK$31.05 at the close of Hong Kong trading, the most since April 10, after the company reported a 21 percent increase in earnings before interest, taxes, depreciation and amortization, or EBITDA, to $450.6 million that Deutsche Bank said was below market expectations due to lower retail revenue and narrower margins at Sands’ Four Seasons Plaza property. Net income climbed 5.8 percent to $277.4 million.
Sands’ business has benefited from a rise in Chinese tourists visiting the world’s largest gambling hub of Macau. Competition has also heated up in the former Portuguese colony as Sands and rivals including Galaxy Entertainment Group Ltd. build more resorts to draw gamblers from China’s mainland.
Sands China’s first-quarter net revenue gained 25 percent to $1.45 billion, according to a statement prepared in U.S. GAAP standards from parent company Las Vegas Sands Corp.
Earlier this month, Sands China opened the first phase of Sands Cotai Central, the company’s latest resort on the increasingly popular Cotai Strip. It will have about 5,800 hotel rooms when completed in 2013 under the brands Conrad, Sheraton and Holiday Inn. It now offers 1,800 rooms.
The Hong Kong unit of Las Vegas Sands already operates the territory’s largest resort, the Venetian Macau that boasts singing gondoliers, a grand canal and an artificial blue sky.
Singapore Profit Surge
The Macau casino operator’s parent Las Vegas Sands Corp. reported a 72 percent gain in first-quarter net income to $498.9 million, beating analysts’ projections, aided by its U.S. and Singapore businesses. Casino revenue in Singapore surged 51 percent to $701.3 million in the quarter. The Marina Bay Sands there averaged 98 percent occupancy at $341 a night, the company said. In Las Vegas, casino revenue jumped 91 percent to $158.7 million.
The number of tourists to Macau increased 8 percent to 7 million in the first three months from a year earlier. Casino revenue in the former Portuguese colony also climbed 27 percent to 74.3 billion patacas in the first quarter.