Sands guarded about S'pore

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Sands guarded about S'pore’s casino industry in the future

Postby DM101 » Tue Mar 02, 2010 11:19 pm

Despite all the media hype about Sentosa IR being off to a “good start” as proclaimed by the Straits Times, officials from Las Vegas Sands (LVS) which will operate Singapore’s second casino Marina Bay Sands scheduled to open on April 27 appeared to be guarded about its prospects.

LVS president and chief operating officer Michael Leven told the Reuters Travel and Leisure Summit:

“We are not disappointed in what we’re seeing in Genting, but it’s too early to assess”.

LVS is still seeking to refinance about US$5 billion of US loans this year and it is counting on LVS’s performance to clear the convenants.

Leven said LVS will need to generate at least US$400 million in EBITDA from Marina Bay Sands in a bid to meet debt covenants.

“We’re accumulating cash … the only risk is if Singapore doesn’t do well. We have to do $400 million in EBITDAR to clear covenants. If we don’t do that, we’ve made a bad investment in Singapore,” he added.

Chief Financial Officer Kenneth Kay said on a conference call last week LVS had US$11 billion in long term debt as of December 31, 2009, with an average weighted interest rate of four percent.

(EBITDAR definition: Earnings Before Interest, Taxes, Depreciation, Amortization and Rent. An approximate measure of a company’s operating cash flow based on data from the company’s income statement. Calculated by looking at earnings before the deduction of interest expenses, taxes, depreciation, amortization, and rent. Similar to, but less common than, Earnings Before Interest, Taxes, Depreciation, and Amortization.)

Leven’s remarks, which was reported widely by Reuters, Bloomberg and Macau Daily, was not covered by the Singapore media which continues to mislead Singaporeans with its inaccurate portrayal of the situation on the ground.

As early as September last year,an analyst from Citicorp Anil Daswani expressed doubts about the profitability of Singapore’s two integrated resorts.

She said that assuming MBS contributes 20 per cent of LVS’s total EBITDAR in its first full year, every eligible Singaporean will have to go to the casino five times a year and spend more then the average visitor to Macau.

However, a hefty entry fee of $100 is likely to put off some Singaporeans. Furthermore, unlike Las Vegas or Melbourne, Singapore has a small population of only 5 million people.

Ronnie Chan, chairman of Hang Lung Properties Ltd., Hong Kong’s fifth-biggest developer by market value, said recently in a Bloomberg Forum in Hong Kong that the two casino-resorts in Singapore will fail because they won’t be able to attract high-rollers:

“The big rollers are what make money in casinos, they will never come to Singapore, it’s a family entertainment” location. You think big-rollers will go to Singapore where they have teeth and fangs coming out sideways? There are too many rules. I was in Sentosa island, I really think that it’s going to be a flop…..The whole integrated entertainment industry, I’m worried for them. The good thing about Singapore is that if you flop, you’re given a second chance,” he said.

A few years ago, the state media gave extensive publicity to the opening of the now defunct Tang Dynasty Village in Jurong, but its name is not dead and buried.

The Sentosa IR, opened for more than two weeks ago had seen more foreign workers than high-rollers so far. If the situation does not improve, there is a chance that the two IRs may become “white elephants” in the middle of Singapore’s Central Business District.

Source: http://www.temasekreview.com/2010/03/02 ... he-future/
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Re: Sands guarded about S'pore’s casino industry in the future

Postby holypendant » Tue Mar 02, 2010 11:47 pm

instead of the $100 fee they charge for singaporean, and free for foreigners, They should make it to all people that in order to step to casino, all muz chang $100 non-negotiable chips. liddat then make money mah.... Now is alot more foreigners go there see see look look and nvr play... If really becum white elephant then seriously it will be a laughing joke...

Juz my views..
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