Will this news propel Genting Malaysia to yet another height?
Ian C. Sayson from Bloomberg has this to report.
Aug. 28 -- Philippine billionaire Andrew Tan and Star Cruises Ltd. will today open their $700 million Resorts World Manila, which may more than double the city’s casino revenue.
“Our expectation is this will contribute to earnings within the first year of operations,” said Kingson Sian, president of Alliance Global Group Inc., the holding company of Tan, the Philippines’ fourth-richest person. “We believe in the potential of Philippine tourism.”
The venture, Travellers International Hotel Group Inc., will open the first floor of a three-level casino at a complex that will include hotels and a shopping mall. Resorts World Manila may earn 21 billion pesos ($430 million) in gambling revenue next year, compared with the city’s 17 billion pesos in 2008, according to Macquarie Group Ltd. analysts.
“This can create a lot of buzz and attract regional players into the Philippines,” said Manila-based CLSA Ltd. analyst Raffy Manalaysay. “It can help the government to get its casino project moving.”
Alliance Global rose 5 percent to 5.10 pesos yesterday in Manila trading, boosting its gain this year to 193 percent. Star Cruises’ Hong Kong-traded and Singapore-listed shares have more than tripled.
The resort will draw 11.1 million visitors and raise $315 million in gambling taxes over three years, Sian said.
On earnings, it is estimated that Travellers Hotels and Casino will make 6.41 billion pesos in net income next year on espected sales of 23.04 billion pesos, Macquarie analysts Nadine Javellana, Edward Ong and Alex Pomento said in an Aug. 10 report. The company’s profit will reach 7.44 billion pesos in 2011 on revenue of 25.02 billion pesos, they added.
Sian declined to comment on Macquarie’s forecasts.
The participation of Star Cruises will allow the project to tap the cruise operator’s network of more than 2.5 million customers, he said. Star Cruises operates casinos on its ships.
The resort will provide bus services for Filipinos living outside Manila, Sian said.
“The whole idea for this kind of investment is to grow the market and not grab from the existing businesses,” he added. We have a product that we can market for tourists to come in a big way. This is not just a casino.”
The project, occupying part of a former military camp near Manila’s airport, will have three hotels with 1,574 rooms, a 30,000 square meter (323,000 square feet) casino and a 30,000 square meter shopping mall.
The resort’s casino will have 300 tables and more than 1,000 slot machines by the end of the year, when all three floors will be ready, Sian said. The 100 tables that will be ready today already make it the Philippines’ biggest casino.
On Asia’s gambling boom, Philippine Amusement, the casino regulator and state-owned casino operator, owns four casinos in Manila with a total of 293 tables, according government data. Pagcor Pavilion, the state-owned company’s biggest casino, has 92 tables. The opening of Resorts World Manila is another step in the Philippines’ effort to tap Asia’s gambling boom. The casino resort could gain a 2 percent share of revenue earned from high rollers in Asia, estimated at $10.9 billion, the Macquarie analysts said.
Macau, the only city in China where casinos are legal, surpassed the Las Vegas Strip as the world’s biggest gambling hub in 2006. In Singapore, Las Vegas Sands Corp. is building the Marina Bay Sands casino resort, estimated to cost more than $5.25 billion, to compete with the S$6.6 billion ($4.6 billion) project being built by Malaysian casino operator Genting Bhd.
Travellers is one of four groups that won approval last year to build hotels and casinos within the $20 billion Pagcor City on Manila Bay, a project of the government’s Philippine Amusement & Gaming Corp. Sian said Travellers may start building its share of the project as early as next year. The venture last year committed to spend $1.1 billion to develop 91 acres in Pagcor City into a complex of hotels with 3,400 rooms and a theme park.
Star Cruises is controlled by Genting and its Chairman Lim Kok Thay, according to data compiled by Bloomberg. Genting shares have gained 78 percent this year.
Can we cystal ball gaze the potential price of Genting and Genting Malaysia when this project come on steam? Any ball park prices?
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