Listen to this article
This is an experimental feature. Give us your feedback. Thank you for your feedback.
What do you think?
Sands China, the Hong Kong-listed Macau casino operator, suffered a 40 per cent fall in net profit for the second quarter as an impairment charge exacerbated a broader slowdown in the world’s largest gaming market.
The owner of the Venetian Macau, the world’s largest casino, on Thursday said results were also affected by a lower rate of money won by the casino from gamblers.
Profits took an additional hit from a US$100.8m one-off charge incurred for abandoning construction on two parcels of land in Macau’s Cotai Strip after the government refused to grant final permission for the projects, as well as US$43.5m in pre-opening costs for Cotai Central, the company’s new casino resort scheduled for completion next year.
The drop in Asia winnings contributed to lower earnings for parent Las Vegas Sands, which said net profit shrank 34 per cent in the second quarter.
Sheldon Adelson, the billionaire chairman of Sands China and Las Vegas Sands, said he remained confident about Macau’s outlook.
He said the company had submitted design plans to the Macau government for a new project on a site known as “parcel three” with work slated to begin in November. Sands China is on track to open the second phase of Cotai Central on September 20, he added.
Mr Adelson and Las Vegas rival Steve Wynn, chairman of the world’s third-largest gaming company by sales, are continuing to invest heavily in Macau despite a sharp slowdown in gaming revenue growth this year.
Wynn Resorts’ subsidiary Wynn Macau last week reported its first drop in quarterly revenue since 2009, hit by slowing Chinese economic growth and rising competition in the Asian gaming hub.
Fitch Ratings this week cut its forecast for growth in Macau gaming revenue this year to 10-12 per cent from 15 per cent, citing the impact of the slowdown in mainland China, where most Macau visitors come from.
The latest figures show total gaming revenue rose 12 per cent in June from a year ago, well off the pace of 42 per cent growth for 2011 and 58 per cent in 2010.
Aaron Fischer, gaming analyst at CLSA, said Sands China would benefit from the extra cashflow coming in from its Cotai Central property, but added he was “grossly disappointed” by the first phase of the $4.4bn resort, which opened in April because of a lack of exciting attractions which could deter visitors.
Shares in Sands China were down 4.5 per cent on Thursday afternoon in a nearly flat broader Hong Kong market.