By Kate O’Keeffe
Of DOW JONES NEWSWIRES
HONG KONG (Dow Jones)–Casino operator SJM Holdings Ltd. (0880.HK) said Wednesday its net profit nearly quadrupled in 2010 because of soaring gambling revenue in Macau, the world’s largest gambling hub, and improved operating results at some of its casinos.
The result, which beat analyst expectations, was announced less than a week after kingpin Stanley Ho said a family dispute between the gambling tycoon and his heirs over control of his casino empire had been settled. Though the lack of details in a written statement issued by Ho left unclear who would control SJM.
The company, which earlier said in a statement to the Hong Kong Stock Exchange that the recent settlement would not materially affect its management or strategic direction, said SJM’s net profit for the 12 months ended Dec. 31 was HK$3.56 billion, up from HK$906.7 million a year earlier.
The result was higher than the average HK$3.21 billion net profit forecast of 10 analysts in a Thomson Reuters poll.
SJM, Macau’s largest casino operator by revenue, said in a statement that its prospects are “excellent” given continued strong growth in visitation and spending in Macau, general prosperity in Asia, its own casino network and its balance sheet. “While some new capacity will be added to the supply of gaming facilities by competitors in Cotai in 2011 and 2012, this is not expected to have a significant effect on the Group’s business, which is largely concentrated on Macau Peninsula” the company said. It, however, added it is still awaiting the results of its application to the local government for rights to land in Macau’s Cotai area, where rivals are investing billions to build casino-resorts.
Galaxy Entertainment Group Ltd. (0027.HK) said last week its HK$14.9 billion (US$1.9 billion) casino-resort in Cotai will open May 15, with analysts expecting it to be the only new resort to open in the Chinese gambling territory this year.
Sands China Ltd. (1928.HK) is spending over-US$4 billion on a Cotai expansion project, which analysts forecast will open in 2012. Wynn Macau Ltd. (1128.HK) and MGM Macau have plans to build in Cotai as well but are, like SJM, still waiting for land rights from the government.
SJM reported a 68% rise in revenue to HK$57.65 billion from HK$34.35 billion a year earlier. The pace of growth outstripped the territory’s overall revenue growth of 58% in 2010.
The company also said its fourth quarter net profit was HK$1.13 billion, up 30% from the third quarter’s HK$867 million.
SJM proposed a final dividend of HK$0.30, after paying a HK$0.09 final dividend in 2009.
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