Sands China Profit Jumps 52% Aided by New Macau Casino Resort
Net income for the Hong Kong-listed unit of Las Vegas Sands Corp. (LVS) rose to $467 million from $306.7 million a year ago, according to a statement from the parent company. Net revenue also climbed, rising 48 percent to $1.97 billion for the three months ended in December.
Sands China has joined rivals such as Galaxy Entertainment Group Ltd. (27) in expanding on Macau’s popular Cotai strip, a piece of reclaimed land that’s an Asian equivalent of the Las Vegas strip. Sands Cotai Central, the operator’s newest resort which opened in April, has been adding more hotel rooms under the Sheraton brand. Macau is the only city in China where casinos are legal.
“This positive result mainly comes from strong ramp-up of its Sands Cotai Central business,” Kenneth Fong, a Hong Kong- based analyst at JP Morgan said in a report ahead of the earnings announcement.
Adjusted property earnings before interest, taxes, depreciation and amortization, or Ebitda, increased 44 percent to $619.9 million. That compares with a median estimate of $579.5 million from a survey of six analysts conducted by Bloomberg News.
Sands China rose 2.2 percent to HK$39 in Hong Kong trading yesterday, before the company published the earnings. The stock has climbed 15 percent in 2013, outperforming the 5.1 percent gain in the benchmark Hang Seng Index.
Sands plans to invest $2.8 billion to build its fifth resort, to be called the Parisian, in Macau.
The Parisian will have a replica of the Eiffel Tower, 3,000 hotel rooms and other family-oriented facilities to attract middle-class gamblers from China, who provide wider margins. The project is scheduled to begin construction in the second quarter, Sands China Chief Executive Officer Edward Tracy said on Jan. 28.
Macau casino revenue rose 20 percent to a record of 28.2 billion patacas ($3.5 billion) last month, as Christmas promotions drew more holiday-makers to the only city in China where casino gambling is legal. Full-year casino revenue climbed 14 percent to 304 billion patacas, also a record.
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