MGM China Rises on Special DividendVinicy Chan
MGM China Holdings Ltd., the casino venture between a daughter of gambling mogul Stanley Ho and MGM Resorts International, rose in Hong Kong trading after saying it will pay a special dividend.
MGM China climbed as much as 5.3 percent to HK$17.80, before closing 2.8 percent higher at HK$17.38. The company will pay a special dividend of HK$1.02 a share, or about HK$3.87 billion ($499 million), it said in a stock exchange statement yesterday.
Revenue rose 2 percent to $731 million, the company said. Casino operators including MGM, Galaxy Entertainment Group Ltd. and Sands China Ltd. are benefiting from an increase in mainland tourists to Macau, the only Chinese city where casinos are legal.
MGM China’s adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, increased to $176 million from $174 million a year earlier. That matches the median estimate of five analysts surveyed by Bloomberg News.
The company partly controlled by Pansy Ho, Stanley Ho’s daughter, received government approval on Jan. 9 to build its first resort in Macau’s Cotai area, Asia’s equivalent of the Las Vegas Strip.
MGM plans to develop a HK$20 billion Cotai resort to draw mass-market gamblers who provide wider profit margins than VIP patrons. High-stakes Chinese bettors curbed spending amid a slowdown in the world’s second-largest economy last year.
Galaxy, controlled by Hong Kong business tycoon Lui Che-woo, has said it plans to invest as much as HK$50 billion to build the third phase of its resort in Cotai. The company expects to begin construction at the end of this year or early 2014.
Billionaire Sheldon Adelson’s Sands China Ltd. plans to invest at least $2.5 billion to build its fifth resort in Macau, to be called the Parisian.
Casino revenue in Macau, the world’s largest gambling hub, rose 14 percent to $38 billion in 2012. CLSA Ltd. expects casino revenue in the Chinese city to top $100 billion by 2020.