Sands China shares hit a lucky spot

PUBLISHED : Friday, 03 February, 2012, 12:00am
UPDATED : Friday, 03 February, 2012, 12:00am


Shares in Sands China rose 4.9 per cent to a record yesterday, after the Macau casino operator reported soaring profit and announced plans to pay dividends two times a year.

The company said profit in the fourth quarter rose to US$306.7 million, up 43.8 per cent from a year earlier. That sent the company's shares, up 26 per cent this year, to a high of HK$27.75 at the close.

A big increase in high-stakes gambling volumes at the firm's Four Seasons Macao casino helped drive the gains. VIP chip turnover at the Four Seasons soared 64 per cent from a year earlier to US$7.52 billion after Sands added several new VIP junket operators.

The firm is 70.3 per cent owned by New York-listed Las Vegas Sands, owned by magnate Sheldon Adelson.

Analysts partly credited the strong results to Sands' efforts to rebuild relationships with junkets - the middlemen who bring high-stakes players to casinos, issue them with credit and collect their debts in exchange for a hefty commission. This was after the firing of former Sands China chief executive Steven Jacobs in mid-2010.

The company and Jacobs are engaged in a Las Vegas lawsuit regarding his dismissal, which he alleges was carried out 'without cause' after he resisted Adelson's 'repeated and outrageous demands' that he 'use improper 'leverage' against senior government officials of Macau' to win favourable treatment for Sands' development plans and fend off unfavourable policy decisions.

Sands, which has described Jacobs as a 'disgruntled former executive', has sought to rebuild relationships with junket agents since his departure.

That effort has helped the company gain market share in Macau in recent months. The company's share of casino revenue rose to 19 per cent last month from 15 per cent a year ago, Adelson said yesterday.

Sands earlier this week announced a maiden dividend payout of HK$4.67 billion, or 58 HK cents per share. That helped parent firm Las Vegas Sands announce a US$1 per share dividend yesterday.

Adelson, the biggest shareholder of Las Vegas Sands, said Sands China planned to start making regular dividend payments twice a year. He did not specify a payout ratio, but joked that 58 - the dividend that was just announced - was a good number according to fung shui and worth sticking with.

Executives said yesterday that a more than US$4 billion new Cotai casino would begin opening in phases in about eight weeks.

The project, called Sands Cotai Central, will be the firm's biggest resort in Macau. It also operates the Venetian, Sands and Four Seasons casino hotels.

The first phase, opening around the end of next month, will feature 600 Conrad-branded hotel rooms, 1,200 Holiday Inn-branded rooms, 200 main casino floor gaming tables and up to 140 VIP gaming tables.

The Cotai Central complex covers 13.7 million square feet and has 6,000 hotel rooms, or twice as many as the Venetian. Work on the project began at least five years ago but was suspended in 2008 during the financial crisis when the company temporarily ran out of funds.


The drop in Las Vegas Sands' stocks in March 2011 after it said it was being investigated by Hong Kong for alleged violations