International edition
August 19, 2018 | Edition Nº3553

Founder Sheldon Adelson plans to spend $1.1 B remodeling the Sands Cotai Central

Las Vegas Sands bets big on Macau

Las Vegas Sands bets big on Macau
Billionaire founder Sheldon Adelson is planning to spend an additional $1.1 billion remodeling the Sands Cotai Central resort.
United States | 01/25/2018

Surpassing Wall Street estimates and the all-time low Macau betting industry is facing, the operator reported earnings increased 20 percent to $731 million in the fourth quarter, while sales grew to $3.44 billion.

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n Wednesday, the world’s largest casino operator beat Wall Street estimates and reported strong updward results in their sales and profits for its Macau unit, Sands China. The reported earnings reached 20 percent -$731 million- in the fourth quarter, which beat the median estimate of $718 million by seven analysts.

Sands, based in Las Vegas, has invested more than any other operator in the only place in China where casino gambling is legal. Billionaire founder Sheldon Adelson is planning to spend an additional $1.1 billion remodeling the Sands Cotai Central there.

“Our strategy to build integrated results towards scale and diversity is clearly paying dividends, as Macau’s mass and tourism growth accelerates,” said Adelson on a conference call. “I’m very optimistic and I’m very, very confident about the growth of Macau.” Adelson also said the company has received expressions of interest in Sands’ first resort in Macau, but has no plans to sell.

Gambling in Macau is recovering, but remains well below the 2013 annual high. Still, there’s a margin of uncertainty in Macau as the territory plans to lay out the process for casino concession licenses this year. News that MGM Cotai, which opens on Jan. 29, was allotted 125 new gaming tables--fewer than the expected 150--sent some casino shares tumbling in Hong Kong.

Shares of MGM China Holdings fell as much as 8 percent in early trading Thursday, the most in more than a year on an intraday basis. Despite its earnings beat, Sands China dropped as much 4.7 percent.

For now, Sands is focused on attracting casual players, tourists and families with property renovations. The London-themed remodel of the company’s Sands Cotai Central property will feature replicas of Big Ben, Parliament and Tower Bridge, Adelson said. Double-decker buses will carry guests around the area. And they’ll be able to get cash from faux telephone booths with ATMs inside.

The Macau casino market is bouncing back from a three-year slump, prompted by a government crackdown on corruption, though betting remains below the all-time high. Gamblers are being drawn back to market by a still-strong mainland economy and a string of new resorts designed to appeal to high-rollers as well as casual gamblers.

In Macau, the operator’s winnings at table games for recreational gamblers increased 27 percent -- the highest such win since 2014 and outpacing the growth in the overall market, according to the company.

Well-to-do players, below the free-spending VIPs, accounted for most of the growth in Macau, attracted by renovated rooms at Venetian and the Four Seasons, Morgan Stanley analysts led by Praveen K Choudhary said in a note Thursday. Still, the operator’s new Parisian, opened in 2016, reported weaker-than-expected earnings with some premium rooms under renovation, according to the note.

Profit in Sands’ hometown of Las Vegas rose despite a tourism slump tied to the Oct. 1 mass shooting and gained in Singapore as well.

For the fourth quarter, profit increased to 88 cents a share, excluding some items, Sands said in a statement. That beat analysts’ projections of 77 cents. Sales grew to $3.44 billion, beating estimates of $3.26 billion on strength of casino results in Macau and Singapore, where Sands is also the largest operator.

Shares of Las Vegas Sands rose as much as 4.4 percent to $80.82 in extended trading after results were announced. The stock fell 0.3 percent to $77.44 at the close in New York and rose 30 percent last year.

Earlier this week, Wynn Resorts also reported quarterly results that beat Wall Street estimates and outlined plans to expand the $4.2 billion Wynn Palace on Macau’s Cotai Strip as well as plans for a new property in its hometown of Las Vegas.

Yogonet.com/ Bloomberg News
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