HONG KONG—Sands China Ltd. said Tuesday its 2009 net profit rose 22%, driven by higher revenue on a rebound in visitors and by cost-cutting measures at the Macau casino operator.
The Las Vegas Sands Corp. unit, which in 2008 halted work on a major expansion in Macau at the height of the global financial crisis, said it expects construction to return to full swing this month, with completion targeted for July 2011.
The resumption of the construction in Macau's Cotai area comes after Macau's gambling revenue surged at the end of 2009, adding to signs the world's biggest gambling market by revenue is back on its feet following the global downturn, the H1N1 flu outbreak, and the imposition of visa restrictions on travelers to the special administrative region from mainland China.
Macau's December gambling revenue rose 48% in December to 11.45 billion patacas, or about $1.5 billion, according to Macau's government.
Sands China, Macau's second-largest casino operator by revenue after SJM Holdings Ltd., said its net profit for the year ended Dec. 31 was US$213.8 million, up from US$175.7 million in 2008. The result was slightly below the average forecast of US$219.6 million from seven analysts polled by Thomson Reuters.
Sands China, which listed in Hong Kong on Nov. 30 following an initial public offering that raised $3.1 billion, recorded an 8.1% rise in annual revenue to US$3.3 billion, from US$3.05 billion a year earlier.
The company didn't recommend a final dividend, nor did it break down its results for the second half of the year.
Sands China operates three large casinos in Macau, including the Venetian Macao and Sands Macao.
The company's earnings growth was in stark contrast to that of its U.S. parent, which last month reported a sharply wider loss due to weak demand in Las Vegas, underscoring the need for major U.S. casino operators to expand further beyond their home market to seek growth.
Sands China's rival Wynn Macau Ltd. said Friday that it expects its 2009 profit to be 41% higher than it had forecast in September, in part because of a rebound in Macau's gambling market growth in the second half.
Sands China said Tuesday it plans to "get into high levels of actual construction" in March with its casino and hotel expansion project in Cotai, which will be home to the world's biggest casino and to the Shangri-La, Traders and Sheraton hotels.
Las Vegas Sands Chairman Sheldon Adelson said Feb. 17 that the first phase of the development of Parcels 5 and 6 in Cotai will open in June 2011, with the second phase opening about six months later.
The company's massive expansion plans have fueled concerns that demand might not catch up with the rise in capacity. However, Mr. Adelson on Monday dismissed the overcapacity worries while speaking at a forum hosted by CLSA in San Francisco, according to a note published by the brokerage firm.
Ratings agency Standard & Poor's said Monday it expects Macau's gross gambling revenue to grow at least 15% for this year, underpinned by growth in the number of visitors and sustained economic growth in mainland China, home to the bulk of Macau's main casino gambling clientele.
Sands China reported an 18% rise in adjusted earnings before interest, taxes, depreciation, amortization, and rent costs to US$809.0 million from US$686.0 million.
Parent Las Vegas Sands' 2009 net loss totaled US$540.1 million, widening from a net loss of US$188.8 million in 2008.
