London comes to Macau as Las Vegas Sands revamps casino resort
26/10/2017 03:47
By Farah Master
HONG KONG, Oct 26 (Reuters) - Las Vegas Sands LVS.N , the
casino behemoth owned by U.S. billionaire Sheldon Adelson, said
on Wednesday it plans to spend $1.1 billion on new projects in
the world's largest gambling hub, including building a
London-themed attraction.
Sands, which owns five properties in the Chinese territory
of Macau via its subsidiary Sands China 1928.HK , said it would
renovate and rebrand Sands Cotai Central as The Londoner Macao
by 2020.
Sands Cotai Central has been one of the company's weakest
properties, analysts said, due to its lack of character and
tourist appeal when compared with Sands' gondola-filled Venetian
or its Parisian property that features a replica Eiffel Tower.
The timing of the Cotai renovation comes as operators in the
former Portuguese colony of Macau such as MGM Resorts MGM.N
and SJM Holdings 0880.HK race to finish their planned resorts
before casino licenses start to expire in 2020.
Authorities have been pushing Macau's casino operators to
diversify away from gambling because of their dependence on the
industry which accounts for over 80 percent of government
revenues.
Sands, which completed the Parisian in 2016, has now turned
to revamping existing properties to further boost its appeal.
The company said it would add new suites and rooms to its St
Regis and Four Seasons properties and renovate VIP areas at the
Venetian and Plaza Macau.
Sands, which reported earnings in line with analyst
expectations on Wednesday, said net revenue for the third
quarter was $3.2 billion. urn:newsml:reuters.com:*:nL8N1N0896
Adelson, the first mover into Macau's Cotai strip - once a
dusty stretch of reclaimed land which now teems with glitz and
cavernous gambling halls - said the market in Macau was
continuing to recover.
"While we have invested over $13 billion in Macao since
2002... we see tremendous future opportunity in the Macao market
as it continues to grow and evolve," he said in a statement.
Analysts were mostly positive on the announcement although
cautioned the renovations would bring some disruption over the
next two years.
"In the long run should be value additive to the company.
However dividend growth may be limited over next few years as
FCF (free cash flow)is redirected to capital expenditure," said
Vitaly Umansky, an analyst at Sanford C. Bernstein in Hong Kong.
(Reporting by Farah Master)
((farah.master@thomsonreuters.com; +852 28431631 , +852 9631
8262; Reuters Messaging:
farah.master.thomsonreuters@thomsonreuters.net))
Keywords: MACAU SANDS