Sands China earnings below market forecast

PUBLISHED : Wednesday, 03 March, 2010, 12:00am
UPDATED : Wednesday, 03 March, 2010, 12:00am

While all other Macau casino stocks rose on news of February's 69.4 per cent revenue surge, shares in Sands China slipped yesterday after the newly listed firm reported maiden profit that was short of expectations.

Sands, which raised HK$19.41 billion in a November share sale, said net profit rose to US$213.8 million last year, up 21.7 per cent from 2008's US$175.7 million owing to higher revenue and cost-cutting measures. But the bottom line was 7 per cent below the US$230 million forecast by a Bloomberg survey of analysts.

Most of the Macau unit's operating figures were released last month in a US filing by parent company Las Vegas Sands Corp.

The owner of Macau's Venetian, Sands and Four Seasons casino hotels said it expected this month to formally close a US$1.75 billion financing deal that would allow it to resume work on a massive 6,000-room Cotai resort project. Construction has been stalled since November 2008, when the company ran out of funds and laid off 11,000 construction workers.

'We will get into high levels of actual construction starting in March,' chairman and controlling shareholder Sheldon Adelson said.

The firm planned to open the 3,700-room first phase of the Sheraton, Shangri-La and Traders branded resort by June 2011, but said yesterday it should take about 16 months to complete once work resumed.

Sands China said net revenue rose 8.1 per cent last year to US$3.3 billion based on Hong Kong accounting principles. Cash flow, or adjusted earnings before interest, tax, depreciation, amortisation and rent (ebitdar), increased 17.9 per cent on cost cutting measures to US$809 million.

Shares in rival Wynn Macau rose 2.77 per cent in a down market yesterday, leading all other casino operators higher on the February revenue report. But Sands China's shares fell 2.02 per cent to close at HK$10.68 following the earnings release. Sands China is the world's biggest gaming company by market value, which stood at HK$87.72 billion at the close of trading yesterday.