Macau government may pace resort openings, UBS says

    The Macau government may take action to pace the opening of new resorts on Cotai, with six competing multi-billion dollar projects scheduled to open between 2015 and 2017, UBS said in a note.
    The firm is basing its analysis on the fact that Las Vegas Sands has temporarily halted construction on the Parisian, pending government approvals. LVS says the project could still open as scheduled in the second half of next year, providing construction resumes shortly.
    The Macau government has a precedent in manipulating market openings, it says.
    “We remind investors that the Macau government has previously done this to space the opening of new projects – using labor quotas so that Sands Cotai Central opened almost a full year later than originally planned.”
    Las Vegas Sands was the first of the casino majors to report second-quarter results on Wednesday, revealing figures that were below even pared down expectations.
    Consolidated EBITDA came in at $1.31 billion, below the $1.33 billion consensus. Macau property EBITDA was $801 million, or $830 million when adjusted for the impact of a bonus program. That’s below the $889 million analysts had been expecting.
    Mass revenues rose 32 percent, less than UBS forecasts for growth of 34 percent, while VIP volume was down 16 percent, compared with forecasts for a drop of 11 percent.
    In Singapore, VIP volumes were down 27 percent year-on-year, at $10.4 billion and below the UBS forecast for $12.1 billion.