Sands China Revenue up 22 Percent

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March 2 (Bloomberg) -- Sands China Ltd., Asia's biggest listed casino operator, said profit rose 22 percent last year as Macau visitors gambled more on card games and slot machines.

Net income increased to $213.8 million from $175.7 million a year earlier, Sands China, which has the second-biggest market share among Macau casinos, said in a statement to Hong Kong's stock exchange today. That compared with the $225 million mean estimate of four analysts surveyed by Bloomberg.

The casino operator controlled by billionaire Sheldon Adelson has gained 2.9 percent in Hong Kong trading after raising $2.5 billion in a Hong Kong initial public offering and convertible bond sale last year. In Macau, the world's biggest gambling hub, revenue from baccarat, blackjack and other games grew 9.7 percent to a record 119 billion patacas ($15 billion) last year.

"We believe Macau gaming is a compelling secular China growth story," JPMorgan Chase & Co. analysts Billy Ng, Steven Li and Joanne Cheung wrote in a note to clients today. "We prefer Sands as it has a differentiated strategy, focusing on the mass market, proven execution ability and the most aggressive expansion plans in Macau."

Sands China fell 2 percent to close at HK$10.68 in Hong Kong. after earlier rising as much as 2.75 percent. The stock has risen 12.9 percent this year compared with a 4.4 percent decline in the benchmark Hang Seng Index.

‘Cost Savings'

Sales at the casino operator, a unit of Adelson's Las Vegas Sands Corp., rose 8.1 percent to $3.3 billion. Earnings per share grew to 3.32 U.S. cents from 2.80 U.S. cents.

Sands China's adjusted earnings before interest, taxes, depreciation, amortization and rent climbed 17.9 percent to $809 million, the company said.

"Our cost savings and efficiency programs remained an important component of our operating strategy throughout 2009," Sands China said. "These initiatives will allow us to expand our adjusted Ebitdar margins in the future and will provide enhanced operating leverage in the months and years ahead."

JPMorgan Chase's analysts rated Sands China "overweight" in new coverage of the stock, and set a share-price estimate of HK$13.50.

Casino operators in Macau, the only place in China where casinos are legal, may expect moderate growth this year, with the risks to long-term growth remaining high, Standard & Poor's said in a report. The operators may tap stock markets and refinance debt this year to improve liquidity, the report said.

"Competition will continue to be intense," said Standard & Poor's credit analyst Joe Poon. "Revenues at existing casinos may decline while new resorts gain a hold in the market."



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