Sands China Quarterly Profit Rises 40% on Mass GamblersVinicy Chan
Sands China Ltd., the Macau casino operator controlled by billionaire Sheldon Adelson, posted a 40 percent gain in fourth-quarter profit as its resorts drew more bettors in the world’s biggest gaming market.
Net income at the Hong Kong-listed unit of Las Vegas Sands Corp. increased to $655.6 million from $467 million a year earlier, according to the parent company’s results filing, based on U.S. generally accepted accounting principles. Revenue rose 28 percent to $2.53 billion.
Sands China and Galaxy Entertainment Group Ltd. are among Macau casinos attracting more tourists as they add shopping malls, theaters and exhibition halls in their resorts. An increase in the number of hotel rooms and an improved rail connection to Macau’s Cotai, Asia’s equivalent of the Las Vegas Strip, also lured more families on vacation from mainland China.
“We believe the growth trend will be enhanced by infrastructure investments,” Adelson said in a statement to the Hong Kong exchange today. Those investments, including a $10 billion bridge connecting Macau, Zhuhai and Hong Kong, and the more than $20 billion spent on nearby Hengqin island, will allow easier access to Macau and accelerate its “evolution as the leading business and leisure destination in Asia,” he said.
Sands China rose 1.7 percent to HK$59.40 at 11:13 a.m. in Hong Kong trading. The city’s Hang Seng Index fell 1.2 percent.
The company’s mass table win, or revenue from mass-market gamblers, rose 58 percent to a record $1.22 billion in the three months ended December, outperforming the industry’s average 40 percent growth, according to the statement.
Sands has the largest proportion of mass-market gamblers among Macau casino operators, said Praveen Choudhary, a Hong Kong-based analyst at Morgan Stanley.
Adjusted property earnings before interest, taxes, depreciation and amortization increased 35 percent to $836.4 million. That compares with the $836.3 million average of nine analyst estimates compiled by Bloomberg.
VIP rolling volume, the sum of all VIP bets, increased 26 percent in the fourth quarter to a record $49.5 billion.
Sands plans to invest $2.8 billion to build the Parisian resort, featuring a replica of the Eiffel Tower, on Cotai. It has also started construction on the St. Regis Tower, the fourth tower of its Sands Cotai Central resort which opened in 2012. The tower will add 700 hotel and apartment-hotel units. Construction of both projects is targeted for completion in late-2015.
Gambling revenue in Macau, the only place in China where casinos are legal, rose 19 percent to $45.2 billion last year, about seven times that of the Las Vegas Strip.