Las Vegas Sands records third quarterly loss

PUBLISHED : Friday, 02 May, 2008, 12:00am
UPDATED : Friday, 02 May, 2008, 12:00am
 

Las Vegas Sands Corp, the world's largest gaming company by market value, reported its third consecutive quarterly loss as rising costs and cut-throat competition for high rollers in Macau pushed the firm US$11.2 million into the red during the first three months of the year.

The company made a net profit of US$90.9 million a year earlier.

The latest result was in spite of growth in the overall gaming industry in the city.

Casino revenues in Macau surged 62 per cent to 29.82 billion patacas in the first three months, faster than the previous quarter's 46 per cent rise, according to government data released last month. Casino winnings from high rollers soared 73 per cent to 20.8 billion patacas, accounting for 69.7 per cent of all revenue.

The developer of the Sands Macao and Venetian Macao said operating income from its Macau operations fell 20 per cent to US$106.39 million from US$133.02 million in the fourth quarter.

Revenue at the two resorts fell 8 per cent to US$723.99 million from the previous quarter. Earnings before interest, tax, depreciation and amortisation dropped 10.8 per cent to US$173.57 million from US$194.6 million.

'We lost significant market share in the VIP business [in Macau],' president and chief operating officer William Weidner said. 'It's clearly unsatisfactory. We've now taken action to remedy our loss of VIP market share.'

The company recently raised commission payments to VIP junket agents and replaced a direct commission on sales of high-roller gambling chips with a revenue-sharing model.

Las Vegas Sands earlier this year resumed its CotaiJet daytime ferry service between Hong Kong and Macau's Taipa Island, but executives yesterday expressed dismay at Hong Kong's delays in approving additional berth space at the Macau Ferry Terminal in Sheung Wan.

'This is particularly frustrating to us,' Mr Weidner said on a conference call with investors.

'We've been given assurances by the Hong Kong authorities before completing our ferry manufacturing orders that more than sufficient slips and berthing capacity existed at the Shun Tak Ferry Terminal in Hong Kong, and that capacity would be made available for us as our boats were delivered,' he said.

The firm moved to address concerns about new restrictions on casino development in Macau.

'We'll need to see how this is interpreted and enforced, but this policy has the potential to significantly limit the addition of new VIP halls, gaming tables and slot machines,' Mr Weidner said.

'But looking at the big picture, we do believe some likely outcome will positively impact Macau's future as a destination, and more importantly our position vis-a-vis that future.'

Las Vegas Sands said companywide first-quarter net revenue rose 71.8 per cent to US$1.08 billion, almost half of which was generated by the US$2.4 billion Venetian Macao that opened eight months ago.

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