It’s not surprising that during these boom times for the Macau gaming industry, most of the publicly traded entities that operate there reported record profits for the second quarter.
MGM China, the recently formed brand of MGM Resorts, which owns 51 percent of the operation, reported a net profit of $245 million for the six months ending June 30. That is four times the $50.9 million reported in 2010 for the same period. Operating revenue rose 92 percent to $1.2 billion. The company went public in June, raising $1.6 billion.
At Sands China, the news was even better. The company’s profit for the first six months of 2011 was $539.5 million, up from $250 million for the first six months of 2010. Net revenue rose 19 percent to $2.36 billion from $1.98 billion.
“Net revenues increased in all segments, driven by strong visitation resulting in part from continuous efforts in marketing and a stable macroeconomic environment in China,” the company said.
Sands China will open an expansion early next year that includes 5,800 hotel rooms and 300,000 square feet of gaming space along with retail, entertainment and dining facilities. Sands Cotai Central will include the Sheraton, Holiday Inns and Intercontinental brands.
Melco Crown reversed a loss of more than $30 million to post a $22.3 million profit for the first six months. Profits continued to increase at the City of Dreams, while the Altira property was flat.
Macau’s newest property, Galaxy Macau, was performing well for its parent, Galaxy Entertainment. Profits for the first six months declined, even though Galaxy posted record revenues. The company blamed pre-opening costs at Galaxy Macau. Most impressive in the Galaxy performance was record revenues posted at the company’s StarWorld property in the Peninsula section of Macau, demonstrating that the company did not cannibalize its previous flagship to build up the Galaxy Macau performance, although the property did not open until May 15, 90 days before the first half of the year ended.
Meanwhile, according to Gaming Inspection and Coordination Bureau Director Manuel Joaquim das Neves, the Macau gaming industry should expect to see gaming revenue rise 35 percent this year, the Macau Daily Times reports.
Given that percentage increase, total revenue for the year would come to over MOP254.3 billion—more than $31.1 billion. It is a big jump from Neves’ original prediction of 2011 revenue growth “between 20 and 30 percent” made in April.
For first seven months of 2011, Macau properties recorded a 45.2 percent increase in revenue year-on-year. In order to end 2011 with growth just above 35 percent, the industry would basically have to hit a wall. Neves’ revised forecast puts casino revenue for the final four months of this year at less than MOP83 billion, which would be up only 17.5 percent from the same period in 2010.
Neves said that, as Macau’s gaming regulator, he is inclined to have “a conservative outlook.”