Sands China Ltd. (1928), the Macau casino operator controlled by billionaire Sheldon Adelson, posted a 63 percent jump in first-quarter profit as it drew a record number of visitors and pledged to increase its dividend.
Net income for the Hong Kong-listed unit of Las Vegas Sands Corp. (LVS:US) rose to $452.9 million from $277.4 million a year earlier, according to a statement from the parent company. Revenue climbed 39 percent to $2.02 billion for the three months ended in March.
Sands China and competitors including Galaxy Entertainment Group Ltd. (27) are expanding in Macau, the only place in China where casinos are legal, to take advantage of an increasing numbers of Chinese tourists. The government today said April casino revenues gained 13.2 percent from a year ago.
“We have every intention of increasing the recurring dividend at both Las Vegas Sands and Sands China in the quarters ahead, as our business and cash flows continue to consistently grow,” Adelson said on an earnings conference call, according to a transcript posted.
Sands China fell 0.98 percent to HK$40.30 in Hong Kong trading today after earlier gaining as much as 3.4 percent.
The gains come as PricewaterhouseCoopers LLP stepped down as auditor for Sands China and its parent. Las Vegas Sands Corp. in March disclosed that there were “likely violations of the books and records and internal provisions” of the Foreign Corrupt Practices Act after an internal audit. It said it has improved its practices with respect to books and records and is cooperating with all investigations.
Las Vegas Sands, which gets about 58 percent of annual revenue from Macau, reported a 15 percent rise in first quarter earnings. Sands China saw a record 14 million visits to its Cotai Strip properties, according to the statement.
The company said in January that it has received government approval to add 200 additional gambling tables. Sands Cotai Central, the operator’s latest resort which opened in April last year, has been adding more hotel rooms.
“Sands Cotai Central continued to ramp up,” Karen Tang, a Hong Kong-based analyst at Deutsche Bank AG said in a research note today. “Sands Cotai Central’s junket business had already surpassed that of the Venetian’s and its slot electronic table games yield is approaching that of Venetian’s, but its mass segment still needs improving.”
Adjusted property earnings before interest, taxes, depreciation and amortization, or property Ebitda, climbed 39 percent to $626.4 million. That compares with a median estimate of $632 million from a survey of five analysts compiled by Bloomberg News.
Sands, which will invest $2.8 billion in the former Portuguese colony to build its fifth resort, said in the statement that initial construction work on The Parisian Macau has started. The Parisian is scheduled to open in late 2015.
Sands China also plans to develop a 2 million square foot retail mall south of Sands Cotai Central in Macau, with almost half that space allocated to shopping and dining options.
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