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More importantly, the result looks likely to be sustainable. First, there is no discernible cannibalisation of Macao income. Total gaming revenues have continued to soar in the Chinese territory, hitting 18.87bn patacas （$2.36bn） in October, up 50 per cent on the equivalent month a year earlier. Revenues for the year to date are up 59 per cent to 152.1bn patacas, according to Macao’s gaming bureau. Second, there appears to be plenty of business for both casinos. Resorts World Sentosa, the second Singapore resort, has yet to report third-quarter figures. But it opened earlier than Marina Bay Sands and completed its first full quarter in June, with similar results. Genting Singapore, the Malaysian-owned operating company, said its second-quarter net profit of S$396.5m （US$308m） was “attributed mainly” to the Sentosa resort.
It is the third leg of the bet, though, that could lead to trouble. Having stabilised the company, Mr Adelson has restarted work on a $4.1bn casino resort project close to its existing Venetian resort in the Cotai Strip area of Macao. The latest project includes Shangri-La, Traders and Sheraton hotels with more than 6,000 rooms, as well as a third casino. It is expected to open in two phases by the end of next year, with a third phase, including another hotel, to be added later.
The risk is twofold. First, even the gaming starved inhabitants of mainland China may not have an inexhaustible appetite for losing their money in Macao’s casinos. LVS is not the only operator after their cash – others have ambitious building plans too. Even if demand holds up, Beijing has moved in the past to limit mainland residents’ access to the special administrative region, and may do so again, for unpredictable reasons.
Secondly, LVS is having trouble getting the buildings off the ground – literally – because of restrictions on the use of foreign workers. A labour shortage has already prompted a three-month delay in the projected completion date of the first phase. More delays are possible, with potentially serious consequences for LVS’s long-term growth.
Investors don’t seem to care, though. LVS closed at $47.23 on Monday, the highest since August 2008. Sands China closed at HK$17.10, up 95 per cent over 12 months. In part, this reflects the success in Singapore and the potential rewards from Cotai: analysts are forecasting earnings before interest, tax, depreciation and amortisation of up to $800m a year from the latest project. With Mr Adelson’s record, though, it might just be that old gambler’s mantra: when you’re on a roll, just keep betting. |
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发表于 2012-2-5 14:31
