Sands Raises Earnings Forecast for Singapore Casino
April 27, 2010
BUSINESSWEEK
By Liza Lin
April 27 (Bloomberg) -- Las Vegas Sands Corp. Chairman Sheldon Adelson raised his earnings forecast for the company’s Singapore casino resort and said the $5.5 billion invested will be recouped over five years.
Adelson, who previously said the Singapore project would add more than $1 billion in annual earnings before interest, tax, depreciation and amortization, didn’t provide a new figure. The return period compares with four years for the Macau project, which cost about half as much to build, Adelson said during today’s opening of the Marina Bay Sands casino in Singapore.
The Marina Bay Sands will be a “grand slam home run,” said the billionaire. “Asian people just love to gamble.”
Singapore aims to lure 17 million visitors and triple annual tourism revenue to S$30 billion ($22 billion) by 2015, helped by two casino resorts, Marina Bay Sands and Genting Bhd.’s Resorts World Sentosa. Today, Marina Bay Sands opened 963 of its 2,560 hotel rooms, the casino, the meeting and convention facilities, parts of its shopping mall and some restaurants.
A grand opening party will be held June 23 when the second phase is unveiled, including a sky park, additional shops and more restaurants.
Asia will contribute 85 percent of revenue once the Singapore casino “ramps up,” said Adelson, who is also the company’s chief executive officer. Macau contributed 72.5 percent of last year’s sales of $4.56 billion, with the balance coming from Las Vegas.
Black Lotus
Las Vegas Sands is competing for gamblers against Resorts World Sentosa, a $4.7 billion development on Singapore’s Sentosa Island that opened its casino Feb. 14, after accepting guests at its hotels and restaurants in January.
The Sentosa development is operated by Genting Singapore Plc, which is controlled by Malaysia’s Genting. The Sentosa project also includes a Universal Studios theme park.
The Marina Bay Sands casino, which makes up about 3 percent of the 15,000 square-meter (161,000 square-foot) resort, has about 600 table games and more than 1,500 slot machines.
The casino’s table games include baccarat, with a minimum bet of S$50 and maximum bet of S$50,000. Luring gamblers is a black Lotus sports car sitting atop a platform in the middle of a circle of slot machines.
Las Vegas Sands rose $1.08, or 4.3 percent, to $26.20 in New York Stock Exchange composite trading yesterday. Shares of the Las Vegas-based company have surged 75 percent this year, after more than doubling in 2009. Genting Singapore rose 1.2 percent to 87 Singapore cents today. The stock has lost 33 percent this year after tripling last year.
Room for Growth
Asia has room for five to 10 cities like Las Vegas, Adelson said. The most likely countries to approve casinos in the region are Japan and Taiwan, he said.
Las Vegas Sands expects the Singapore resort to generate as much revenue as its operations in Macau, Chief Operating Officer Michael Leven said in an interview in New York on Feb. 24.
Marina Bay Sands, built beside the city-state’s financial district, had been scheduled to open at the end of last year. The resort includes three 55-floor hotel towers of rooms and suites topped with the sky park, a structure shaped like a ship.
Singapore announced in April 2005 it was overturning a ban on casinos that had been in place since independence in 1965. Marina Bay Sands and Resorts World Sentosa are the only two casino developments awarded licenses so far.
Adelson also said the gaming industry in Las Vegas is past the bottom, with hotel occupancy rates and the conference business rebounding. He said the company’s Las Vegas hotels are running at 96 percent to 98 percent occupancy this month, and that the average occupancy percentage rate will be back in the 90s this year.
--Editors: Lars Klemming, Frank Longid.
