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    MARKET EDGES

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PREPARED REMARKS

  • SJM Cotai proposal: at "advanced stage"; expects govt decision soon

Q/A

  • Recurring/special dividend:
    • 72% earnings paid out as dividends. Regular dividend will continue to be 50% of earnings and anything more will be classified as special dividend
  • Casino Lisboa/ Oceanus:
    • Increased return per table on Oceanus (target was 20%, actual return was 27% in 2011)
  • QoQ VIP table decline: from 613 tables to 595 tables
    • Nothing to worry about, may go up in Q1 2012
  • Grand Lisboa: 2.44% hold in Q4, compared with 2.53% hold in Q3
  • Old Lisboa margins are benefited from the move of certain VIP business to Grand Lisboa
  • Grand Lisboa Mass market
    • Expanding mass sq ft in 2012 at expense of slot machines; may also move mass tables from other properties
    • Still growing on par with market
  • SCC commission competition:
    • No pressure on commissions; will use credit rather than elevated commissions
  • Grand Lisboa Rolling Chip is very good in February
  • Grand Lisboa VIP renovation: may increase 40 VIP tables (August/September/October 2012);
  • Moving VIP tables from self-promoted casinos to Grand Lisboa?
    • No, right now different table revenue performance thresholds at different properties but performance is holding up
  • Grand Lisboa/Oceanus: VIP business very sticky; very comfortable with VIP at Grand Lisboa
  • Cotai Mass business impact on Grand Lisboa?
    • Does not affect revenue stream
  • 3rd party operations: sees no signs of risk of slowdown

HIGHLIGHTS FROM THE RELEASE

  • The Board recommends final ordinary dividend of HK43 cents per share and special dividend of HK22 cents per share for 2011 year. It is subject to approval at the forthcoming annual general meeting of the Company to be held on Thursday, 10 May 2012.
  • 2011 Gaming revenue: HK$75.514 BN (+32% YoY)
  • 2011 Adjusted Company EBITDA: HK$6,923MM (+42.5% YoY)
    •  Casino Grand Lisboa property EBITDA: HK$3,756MM; property EBITDA margin: 27.2% (US GAAP)
  • 2011 SJM market share: 29%
  • Grand Lisboa occupancy rate increased 14.7% to 92.6%; ADR increased 5.3% to HK$2,055
  • Cash: HK$20.7BN
  • Besides growth of gaming revenue, other factors that contributed to higher Adjusted EBITDA in the
    year were improved operating results at Ponte 16 and Grand Lisboa Hotel.
  • VIP
    • As at 31 December 2011, SJM had 609 VIP gaming tables in operation with 32 VIP promoters, as compared with 507 VIP gaming tables and 33 VIP promoters as at 31 December 2010. As at 31 December 2011, SJM operated VIP gaming in 14 of its casinos.
    • The hold rate for SJM’s VIP operations decreased slightly in 2011 to 2.88% from 2.91% in 2010.
  • MASS
    • SJM had 1,166 mass market gaming tables in operation as at 31 December 2011, as compared with 1,183 mass market gaming tables as at 31 December 2010.
    • Increased mass market table gaming revenue of 24.1% resulted from increased visitation to Macau
      from the Mainland and the Asian region as well as increased spending per visitor.
  • SLOTS
    • SJM had 3,910 slot machines in service as at 31 December 2011 as compared with 4,147 slot machines as at 31 December 2010.
  • During 2011, Casino Grand Lisboa attracted a total of 12,238,494 visitors, an average of 33,530 visitors per day. To continue attracting gaming patrons, Casino Grand Lisboa frequently launches special promotions, such as “Spin2Win”, “Spot the Jackpot”, “Royal Cards” and “Heir to the Throne.” Jackpots are paid frequently, with the total exceeding $267 million for slot machines and over $84 million for table games (Caribbean Stud Poker) in 2011. During the year, the number of active members of the Casino Grand Lisboa loyalty card programme increased by over 83,000 to 394,393.
  • In October 2011 new VIP gaming capacity was added on the second floor of Grand Lisboa with 12 tables. In the fi rst half of 2012 additional capacity for VIP gaming will be added on the 31st floor of the building.
  • In October 2011 SJM completed enclosing and air-conditioning the walkway from the Macau Maritime Terminal to Casino Oceanus. Promotions such as “Scratch and Win” are held regularly and a number of special activities took place in November at the time of the Macau Grand Prix, of which SJM was the sole offi cial sponsor. In the second quarter of 2012 the Oceanus Club is scheduled to open on the third fl oor where Oceanus membership card holders can relax and enjoy various club facilities. Also in 2012 the casino plans to open its third dining facility, a deluxe Cantonese restaurant located on the second floor.