Sands China reports third-quarter profit down 33pc
Chairman expresses confidence despite “challenging environment”
Sands China, the Macau casino operator controlled by billionaire Sheldon Adelson, saw its profit fall 32.8 per cent year on year in the third quarter.
The company’s adjusted earnings before interest, taxes, depreciation and amortisation tumbled to US$545 million from US$811.6 million a year ago, according to a stock exchange filing Wednesday.
Net revenue for the three months to the end of September fell 28.8 per cent to US$1.66 billion.
“While consensus is looking for sequential growth in the thrid quarter, we expect to see a sequential ebita decline among most operators as a result of the drop in gross gaming revenue,” Jamie Soo, an analyst at Daiwa, wrote in a note.
Macau gambling revenue plunged 34 per cent year on year in the third quarter to 54.4 billion patacas, according to data released by the Gaming Inspection and Co-ordination Bureau last week.
During the third quarter, VIP baccarat declined 38 per cent year-on-year to 28.99 billion patacas from 46.77 billion patacas. The VIP segment accounted for 53.3 per cent of the total income of casinos.
Gambling revenue in the enclave is expected to take a further hit by the UnionPay annual cap on cash withdrawals from next year.
“We believe this is negative for regular premium mass players who withdraw cash from ATM machines to buy chips from cage or tables and were frequent visitors,” Morgan Stanley analyst Praveen Choudhary wrote in a report.
Chinese debit card users will be permitted to withdraw cash up to 100,000 yuan per card annually overseas from January 1.
Sands China chairman Adelson noted the “challenging environment in the VIP and premium mass gaming segments”.
Sands China said it is on track to achieve US$200 million in savings this year because of cost cuts and other efficiency improvements.
When two new developements are completed new year, the company will operate 13,000 hotel rooms in four interconnected resorts, over 840 retail stores across the four shopping malls, two million square feet of meeting and exhibition space.
With the completion of St. Regis Macao and The Parisian Macao, it will have almost 13,000 hotel rooms in four interconnected resorts, over 840 retail stores across the four shopping malls, two million square feet of meeting and exhibition space.
“We remain confident that our market-leading Cotai Strip properties, which will be complemented in the future by the St. Regis tower at Sands Cotai Central opening in December 2015, and by The Parisian Macao, targeted to open in late 2016, will continue to provide the economic benefits of diversification to Macau, help attract greater numbers of business and leisure travellers, and provide an outstanding and diversified platform for growth in the years ahead,” Sands China chairman Adelson said in a statement.