Las Vegas Sands sees boost from new Macau resort as Wynn disappoints

[LOS ANGELES] Las Vegas Sands Corp, the world's largest casino owner, reported a jump in profit after opening its newest resort in Macau, a sharp contrast to rival Wynn Resorts Ltd, which said its newest Chinese property was off to a slow start.

Sands' profit rose to 72 US cents a share, excluding some items, the Las Vegas-based company said Thursday in a statement. Analysts were predicting 60 US cents, the average of estimates compiled by Bloomberg.

Sands, founded by billionaire Sheldon Adelson, opened the US$2.9 billion Parisian resort in Macau in September. The property features a half-sized replica of the Eiffel Tower, as well as a water park for kids and a shopping mall with street performers.

It made its debut amid signs of a recovery in gambling in Macau, the only place in China where casinos are legal. The company saw a 19 per cent increase in visitors to its Macau properties in September, compared to the same month last year, executives said on a call with investors.

Sands' neighbouring Four Seasons resort posted a 7 per cent increase in retail sales, which Mr Adelson attributed to the Parisian opening. Gambling volume rose and restaurants are full.

"People want to see that Parisian theme approach," Sands President Rob Goldstein said on a conference call after the results were announced.

"The Eiffel Tower, that facade has great curb appeal."

Total revenue at Sands grew 2.6 per cent to US$2.97 billion, ahead of projections of US$2.82 billion.

New Properties

The company and other Macau operators built their newest properties during a two-year slump in the market, prompted by a Chinese government crackdown on corruption on the mainland. The region experienced its third straight month of gambling growth in October. Reports of higher visitation early in October also suggest the market is rebounding.

Sands' strong quarter contrasts with that of Wynn Resorts, which posted quarterly sales that missed analysts' estimates as its new US$4.4 billion project in the former Portuguese colony of Macau failed to lift betting revenue.

One of the reasons may be nearby construction, which impeded access to the property. Wynn has been working with the Macau government to make improvements, such as crosswalks, to make it easier to get to. Wynn also said it underestimated demand for casual dining options at the new property and is expanding those.

Sands' new Parisian Macao contributed US$19.2 million of adjusted property earnings before interest, taxes, depreciation and amortisation during its first 18 days of operation, the company said.

Adjusted property earnings at the Sands' biggest property, Venetian Macao, surged 23 per cent to US$314.8 million. The tally at the Sands Cotai rose 3.6 per cent to US$176.6 million.

Net sales at the Venetian Macau increased to US$772.5 million, compared with US$699.6 million a year earlier.

In Sands' home market of Las Vegas, property earnings increased 6.9 per cent to US$85.3 million. Earnings at the Singapore's Marina Bay Sands edged up slightly to US$390.7 million, up slightly from a year earlier.

Sands shares rose as much as 4.3 per cent to US$59.20 in extended trading after the announcement. The stock fell 1.5 per cent to US$56.74 at the close in New York Thursday and has advanced 29 per cent this year.

BLOOMBERG