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Sands China seen to get profit hike from new casino tables
Sands China could get a revenue and profit boost after receiving government approval this month for 200 more gaming tables. The gambling company may get about USD500 million in added revenue annually from the new tables, CLSA Ltd. analyst Aaron Fischer said via email. It would get an additional USD200 million of Ebitda, or earnings before interest, taxes, depreciation and amortization each year, he said.
The Macau casino operator controlled by billionaire Sheldon Adelson has joined rivals such as Galaxy Entertainment Group Ltd. in expanding on Macau’s popular Cotai strip. Sands plans to invest at least USD2.5 billion to build The Parisian, its fifth resort in Macau.
Sands China Chief Executive Officer Edward Tracy confirmed the company received approval for the new tables in a press conference Monday. Some of the new tables will be added ahead of the Chinese New Year holiday that starts Feb. 10, he said.
Sands China gained as much as 1.3 percent to HKD38.05 in Hong Kong trading before exchanging hands at HKD37.85 as of 9:36 a.m. local time. The stock has advanced 11 percent this month in Hong Kong trading. While that beats the Hang Seng Index’s 4.3 percent gain, it lags behind the 24 percent jump for MGM China Holdings Ltd. and the 22 percent surge for Melco Crown Entertainment Ltd.
The increase in tables will mean Sands China will have about 26 percent of casino tables in Macau, David Bain, an analyst at Sterne, Agee & Leach Inc. who recommends buying the stock, said in a research note.
Billionaire Stanley Ho’s SJM Holdings Ltd. has the highest market share by revenue among Macau’s six casino operators this month, at 26.2 percent, with Sands China ranked second at 19.6 percent, according to Bain’s estimates.
Macau casino revenue rose 20 percent to a record of 28.2 billion patacas ($3.5 billion) last month, as Christmas promotions drew more holiday-makers to the only city in China where casino gambling is legal. Full-year casino revenue increased 14 percent to 304 billion patacas, also a record.
15pct increase over june 2012 dividend
The board of Sands China has declared an interim dividend of HKD0.67 per share for its shareholders, as filed with The Stock Exchange of Hong Kong Limited on January 25, 2013. The dividend is expected to be paid on or about February 28, 2013. “Sands China is pleased to announce this interim dividend, which represents a 15 per cent increase over the June 2012 final dividend of HKD0.58,” said Edward Tracy, President and Chief Executive Officer, Sands China Ltd. “Led by the strong performance of our Cotai Strip™ Resorts, the Company will continue to advance its strategy of leveraging its integrated resort business model to diversify Macao’s tourism economy through our unparalleled service and product offerings on Cotai,” he added.
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