The Parisian Macao casino resort – developed by gaming operator Sands China Ltd in Macau’s Cotai district – is scheduled to open on September 13, company chairman Sheldon Adelson announced on Monday.
The property will open its doors less than a month after the inauguration on Cotai of Wynn Palace, by rival operator Wynn Resorts Ltd. The latter casino resort is scheduled to open on August 22.
“We are well on track and I am pleased to announce that we plan to open the Parisian on September 13,” Mr Adelson said in a conference call with analysts, following the announcement of the second quarter results of Las Vegas Sands Corp on Monday. Las Vegas Sands is the parent company of Sands China; Mr Adelson is chairman of both firms.
He added that pre-opening efforts for Parisian Macao were “progressing nicely”. According to a number of analysts on the call, Mr Adelson and the casino group’s senior management showed no particular concern regarding the possible impact of Wynn Palace on the operations of Sands China. The firm’s management added during the conference call that Parisian Macao’s inauguration would be a full opening of the property: there were no plans for an opening in phases.
“I have not a shadow of doubt that the Parisian will replicate the success of the Venetian [Macao] as another themed, iconic and must-see integrated resort destination for Macau’s visitors,” Mr Adelson stated during the conference call. “I am extremely confident that with the opening of the Parisian, we will see growth in Macau.”
Market-wide, casino gross gaming revenue (GGR) in Macau declined by 8.5 percent year-on-year in June, marking 25 consecutive months of declines, official data show. It was the lowest monthly tally for Macau casino GGR since September 2010, when the aggregate for such revenue was MOP15.30 billion (US$1.92 billion).
Mr Adelson stated that the firm did not know yet how many new-to-market live gaming tables it would be granted by the Macau government for the casino at Parisian Macao. “We have… tables from other properties that we can move over,” he said.
A number of investment analysts expect the Macau government to follow the policy it employed with the opening of Galaxy Macau Phase 2, developed by Galaxy Entertainment Group Ltd; and Studio City, majority owned by Melco Crown Entertainment Ltd. This would see the government granting both Parisian Macao and Wynn Palace 250 new-to-market tables each.
Brokerage Sanford C. Bernstein Ltd stated in a Monday note that, “with the Parisian opening, Sands China’s core strength[s] lay in optimising the critical mass among its interconnected resorts on Cotai.”
Analysts Vitaly Umansky and Clifford Kurz added: “The company is well positioned to capitalise on Macau’s paradigm shift to Cotai [from the Macao peninsula] and to mass [from VIP gambling].”
Sands China’s total revenues for the second quarter of 2016 declined 16.4 percent year-on-year to US$1.48 billion, according to Monday’s results announcement by the parent Las Vegas Sands.
Las Vegas Sands reports its results using U.S. generally accepted accounting principles, also known as GAAP.
Net income for Sands China between April and June decreased by 39.0 percent compared to the prior-year period, to US$237.0 million.
Sands China’s adjusted property earnings before interest, taxation, depreciation and amortisation (EBITDA) were US$487.7 million, while hold-normalised adjusted property EBITDA was US$495.7 million, according to Las Vegas Sands.
“The operating environment in Macau remained challenging during the quarter; but we do see signs of stabilisation, particularly in the mass market,” Mr Adelson said in a statement accompanying Las Vegas Sands results for the second quarter.
He added: “Our mass gaming revenues in the month of June 2016 increased versus the same month in 2015, the first year-on-year monthly mass gaming growth we have experienced in nearly two years [since September 2014].”
Sands China’s flagship property Venetian Macao generated revenue of US$666.1 million, down by 9.9 percent in year-on-year terms. Adjusted property EBITDA in the second quarter was US$244.4 million, a year-on-year decline of 4.2 percent.
“Second quarter Macau EBITDA was 3 percent below recent consensus expectations, on a 6 percent top line miss,” Wells Fargo Securities LLC analyst Cameron McKnight wrote in a note following the results announcement by Las Vegas Sands.
Mr McKnight added: “Despite the miss in Macau, the [Las Vegas Sands] stock was up in after-hours trading, on positive commentary on June mass gaming revenues.”
Singapore revenue flat
Marina Bay Sands in Singapore – also part of the property portfolio of Las Vegas Sands – generated revenue of US$710.1 million in the second quarter of 2016, down by 0.4 percent compared to the prior-year period. Adjusted property EBITDA was $357.0 million, compared to US$363.3 million a year earlier.
Rolling chip volume was US$6.74 billion for the quarter, a year-on-year decline of 29.1 percent. Non-rolling chip drop was US$935.7 million during the quarter, down by 10.7 percent in year-on-year terms. Slot handle increased 6.0 percent to US$3.25 billion.
“While gaming volumes in Singapore were softer during the quarter, solid growth in slot revenues and the continued resilience of room rates and mall revenues, contributed to an adjusted property EBITDA figure of US$357.0 million, down 1.7 percent compared to the same quarter last year,” Las Vegas Sands said in a press release.
Asked during the conference call about the firm’s plans to build an entertainment arena in Singapore – along with a new hotel tower of approximately 1,000 rooms at its Marina Bay Sands resort – Mr Adelson said Las Vegas Sands was still waiting for feedback from Singapore’s authorities.
“We don’t have an okay from the full government of Singapore at this time,” he said. “We’re hoping after the summer, when vacations are completed, that we’ll approach the government again and see if we can get a final answer there, which we don’t have at this time yet.”
Company-wide – including operations in Macau, Singapore and the United States – net revenue for Las Vegas Sands in the second quarter of 2016 decreased 9.3 percent year-on-year to US$2.65 billion. Net income decreased 32.2 percent to US$394.4 million in the second quarter of 2016, compared to US$581.5 million in the year-ago quarter.
Operating income for Las Vegas Sands in the second quarter of 2016 decreased 24.8 percent to US$518.7 million, compared to US$689.3 million in the second quarter of 2015. Net income declined 30.1 percent to US$328.0 million.
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"With the mainlanders and Hong Kongers now effectively barred from entering Macau, the only rationale possible for keeping the casinos in Macau open right now is a social one which is to keep Macau residents employed"
Managing partner of IGamiX Management and Consulting Ltd