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Las Vegas Sands rises amid signs of turnaround in Macau
[LOS ANGELES] Las Vegas Sands Corp, the world's largest casino company, rose in extended trading on signs a two-year slump in betting is easing in the Chinese enclave of Macau.
The company's mass-market gaming revenue in Macau rose in June for the first time in two years, Sands executives said Monday on a call with investors. The company earlier reported second-quarter sales and profit that missed analysts' estimates amid lower results in Singapore and continued softness in Macau.
"Something good happened in June," Rob Goldstein, Sands' president, said on the call. "The gaming floors are busy, especially on weekends. Macau is morphing into the world's greatest mass market. Hopefully we'll see it for the rest of the summer."
The emerging turnaround in Macau, the world's biggest gambling center, is coming at an opportune moment. Despite the two-year drop in betting, the region is in the midst of a building boom. Wynn Resorts Ltd. is scheduled to open its newest resort, the US$4.1 billion Wynn Palace, on Aug 22.
Sands has its own new resort, the US$2.7 billion Parisian, slated to open Sept 13.
Shares of Las Vegas Sands rose as much as 4.1 per cent to US$49.75 in extended trading after the results were announced. The stock gained 1 per cent to US$47.80 at the close of regular trading in New York.
Sands, the casino operator founded by billionaire Sheldon Adelson, earned 52 cents a share in the second quarter, excluding some items, the Las Vegas-based company said in a statement. Analysts had been expecting 56 cents, the average of 14 estimates compiled by Bloomberg. Sales fell 9.3 per cent to US$2.65 billion, missing estimates of $2.75 billion.
In Macau, Sands' earnings before interest, taxes, depreciation and amortization fell 14 per cent to US$487.7 million.
Ebidta in Singapore, the company's second-largest market, fell 1.7 per cent to US$357 million.
*In Las Vegas, earnings on that basis rose 34 per cent to US$72.5 million.
Sands is the largest casino operator in Macau, the only part of China where gambling is legal. Betting there has been in a two-year slump amid a Chinese government crackdown on corruption that has prompted high rollers to cut back on conspicuous consumption. The market is showing signs of recovery, with the overall drop in betting moderating and visitor traffic on the upswing.
"We're very happy that there's one month that hit the bottom and we have no reason to believe that that's not going to continue," Mr Adelson said on the call.