Inside Asian Gaming

INSIDE ASIAN GAMING | May 2012 100 Briefs Regional Briefs Belle Grande Manila Bay opening delayed at least a year Owing to guidelines set by the Philippine Amusement and Gaming Corp. (PAGCOR), which requires all licensees to have a minimum 800 hotel rooms in an operational state before being allowed to open the casino portion of their integrated resorts at Entertainment City Manila, the opening of Belle Grande Manila Bay will likely be postponed to until sometime in 2013, according to a research note from Union Gaming Research Macau. The property was originally expected to open in the second quarter of this year. Belle Corp’s partner, Leisure and Resorts World, will be responsible for raising the approximately US$70 million additional investment to complete the hotel portion of the project. In addition to the casino component and 800 hotel rooms (spread across three hotel towers), the property will have up to 90,000 square meters of retail space. Union Gaming believes that the one-year (or greater) delay of Belle Grande Manila Bay means that Bloomberry Resorts’ Solaire Manila (which has a managed services agreement with former LVS executives Bill Weidner and Brad Stone) will likely be the first of the four new IRs to open at Entertainment City Manila. The other two properties in Entertainment City will be developed by a JV that includes Genting, as well as Kazuo Okada’s Universal Entertainment. These projects are not expected to open before 2014. LVS sees no need to work with Singapore-type junkets Las Vegas Sands Corp (LVS) isn’t interested in working with Singapore-licensed junket operators to bring gamblers to its casino there, as the company already has sales representatives that perform similar roles, according to comments from CEO and Chairman Sheldon Adelson reported last month by Dow Jones Newswires . “In Singapore, they call (their licensed junket operators) international marketing agents because that’s all they are. They are salespeople… they can’t provide credit, they can’t share their commission, so they are the equivalent of our more than 100 salespeople,” Mr Adelson told analysts during an earnings call. “There’s no reason for us to go after that kind of junkets,” he said. In March, Singapore’s Casino Regulatory Authority issued its first-ever junket-operator licenses to two agents—a long-awaited move that came more than two years after Genting Singapore opened the city-state’s first-ever casino resort, Resorts World Sentosa, in February 2010. Analysts and Genting Singapore executives have said the move was vital for facilitating the local Galaxy reports stellar first quarter results Galaxy Entertainment Group (GEG) released unaudited Q1 2012 results, with EBITDA leaping 202% year-on-year to a record HK$2.2 billion (US$282 million), marking the group’s fourteenth consecutive quarter of EBITDA growth. As of 31st March 2012, LTM (latest twelve months) Group EBITDA was HK$7.2 billion—up 185%. Group revenue reached HK$13.2 billion in the quarter, an increase of 130% year-on-year. GEG’s Galaxy Macau integrated resort generated revenue of HK$7.2 billion and EBITDA of HK$1.3 billion in Q1 2012—its third full quarter of operation. Mass market revenue increased 16% quarter- on-quarter. Operational efficiencies combined with strong mass market performance resulted in EBITDA margin improving for the period to 18% calculated under HK GAAP, and 26% under US GAAP. On an annualised basis, ROI stood at 32%. StarWorld, GEG’s flagship property on the Macau peninsula, reported its 15th consecutive quarter of EBITDA growth, up 28% year-on-year to a record HK$852 million in Q1 2012. Quarterly revenue increased 11% year-on-year to HK$5.5 billion, but fell 10% quarter-on-quarter due to a below expected VIP win rate of 2.7% in Q1 2012 (vs. expected win rate of 2.8%), despite healthy VIP volume. StarWorld’s EBITDA margin for the quarter was 15% under HK GAAP, compared to 13% in Q1 2011 and 14% in Q4 2011. Under US GAAP, EBITDA margin for the quarter was 26%, compared to 23% in Q1 2011 and 23% in Q4 2011. StarWorld’s hotel occupancy for the quarter was an impressive 98%. On an LTM basis, StarWorld generated EBITDA of HK$3.1 billion, which translated to an ROI of 91%. Meanwhile, the third-party owned City Clubs reported EBITDA of HK$43 million in Q1 2012, compared to HK$57 million in Q1 2011. Year-on-year EBITDA at the group’s Construction Materials Division grew 22% to HK$83 million. As of 31st March 2012, GEG was well capitalised and liquid with HK$9.5 billion of cash, including restricted cash of HK$1.9 billion. Smashing expectations—Galaxy Macau Construction progress on Belle Grande Manila Bay