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Thread: MBS on track to earn US$1.75b this year

  1. #1

    Default MBS on track to earn US$1.75b this year

    http://www.businesstimes.com.sg/sub/...18340,00.html?

    Published October 29, 2011

    MBS on track to earn US$1.75b this year

    It confounds critics with another set of sterling numbers for Q3

    By GRACE LEONG


    ANALYSTS who underestimated Marina Bay Sands' earnings potential this third quarter were promised 'egg-wiping face towels' by Las Vegas Sands chairman Sheldon Adelson at the company's earnings call with investors yesterday.

    In fact, Mr Adelson also awarded himself an egg-wiping towel because he had thought the Singapore property would produce only US$1 billion in earnings before interest, taxes, depreciation and amortisation (Ebitda) for fiscal 2011.

    But MBS, which he called 'the eighth wonder of the world', already exceeded his initial projection and is on track to earn more than US$1.75 billion in Ebitda this year, thanks to record VIP rolling revenues, mass market and slot play. 'At this stage, it looks like I'm out by a pretty fair amount, so I should be getting egg-wiping towels,' he said.

    For the third quarter ended Sept 30, MBS posted US$413.9 million in adjusted property Ebitda and adjusted Ebitda margin of 52.2 per cent. That's up from US$241.6 million a year ago and an Ebitda margin of 49.7 per cent. MBS's net revenues totalled US$792.4 million for the third quarter, of which US$651.9 million came from the casino, and the remainder from retail, hotel rooms and restaurants. That's up from US$485.9 million a year ago.

    MBS's hotel average daily rate rose to US$327 for the third quarter, up from US$246 a year ago. Occupancy also jumped to 98.1 per cent for the quarter, up from 68.2 per cent.

    Downplaying some investors' concerns that Singapore's gaming growth could slow as the global economy cools, Mr Adelson pointed to blistering third-quarter growth in VIP rolling chip volume, which jumped 63 per cent to US$16.7 billion.

    'Our VIP business is coming from fewer people than we've seen in Macau. But people are rolling $1 million, $2 million, $10 million. That's a consequence of that kind of roll,' said Rob Goldstein, LVS's president of global gaming operations.

    Most of MBS's highrollers are either tourists or Singapore permanent residents from mainland China, Hong Kong, as well as Indonesia, Malaysia, South Korea and Japan. 'The strength of that business resides from China either from the mainland Chinese or those having a second home in Singapore,' Mr Goldstein said. 'In Asia, in the high-end business, customers stay for weeks, not days.'

    For the third quarter, mass market revenues grew 34 per cent to US$1.2 billion, while slot play, which includes electronic table games, jumped 105 per cent to US$2.79 billion. A majority of the mass market business comes from gambling tourists, he said. 'This year, we're expecting US$100 million a month in total casino win out of that segment,' he said.

    Meanwhile, in North Asia, South Korea and Japan are making more urgent moves towards legalising casino gaming and integrated resorts, Mr Adelson said.

    'If one of those legalises it, the other is going to build it in a heartbeat,' he said. 'There is a competition between the countries on who's going to get out there first . . . so they're accelerating their efforts.'

    Las Vegas Sands reported net earnings of US$444.8 million, 55 US cents a share, on revenue of US$2.41 billion for the third quarter. A year ago, the company reported earnings of US$265.2 million, 34 US cents a share, on revenue of US$1.91 billion.

    Although its Las Vegas properties' results were greatly overshadowed by those in Asia, company officials said table-game drop at the Venetian and Palazzo in Las Vegas increased to a record US$536 million this quarter.

  2. #2
    Join Date
    Jun 2008
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    If Genting Singapore can achieve profits just USD1B per year, they cover their costs in 5-6 years.
    After that, it is just recurring dividends for shareholders... think not far in horizon liao... hosei liao!
    OK, back to property discussion...

  3. #3

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    They should be taxed more....

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