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To our shareholders: 2010 was a year of steady growth for the Group, as buoyant financial markets globally translated into growth in consumer spending, travel and gaming. With such a favourable backdrop, coupled with our efforts to strengthen our business platform and maximise the synergies across our core businesses and our flagship investment project, Ponte 16, the Group sustained a strong growth momentum in 2010.
With our travel business posting a profit and Ponte 16 achieving encouraging growth in operating results, we are pleased to have delivered improved results during the year.
Success Comes From Unique Positioning
In February 2011, Ponte 16 celebrated its third anniversary, enabling the project to reflect on the success of its perceptive business approach. Over the past year, Ponte 16 has continued to build on its unique brand positioning, implementing a number of strategic initiatives to further distinguish itself as a premier destination with attractive historical and cultural features for tourists all over the world. Ponte 16 is already reaping the benefits of its efforts.
The opening of MJ Gallery at Ponte 16 (the "Gallery") in February 2010 marked a momentous milestone for Ponte 16. The first of its kind in Asia, the Gallery has brought to life some of Michael Jackson's most iconic moments through a dynamic exhibition of rare and genuine mementos, offering an exclusive experience for visitors. In addition, Ponte 16 partnered with Julien's Auctions to hold "Rock the World" Exhibition as well as Hollywood "Legends" Exhibition and Auction in 2010, bringing to Macau a rare collection of pop culture historical artifacts and attracting visitors and buyers from around the world. The unprecedented success of these events has demonstrated the world-class standard of Ponte 16's facilities and services, and more importantly, enhanced the international image of the brand.
The partnership of Ponte 16 with a world-renowned auction house in staging large scale exhibitions and auctions in Macau has shown its dedication to bringing more international events to the local scene, which enhances the destination's tourist appeal. These initiatives also supplement the exciting features of Ponte 16 in the culturally rich Inner Harbour District and further strengthen its unique position as a perfect mix of entertainment, culture and tourism in Macau. Moreover, these efforts have not only successfully promoted Ponte 16 and Macau to the world and effectively diversified the customer mix of the resort, but also contributed to the increase in visitor flow to the resort and its sound performance.
During the year, Ponte 16 continued to deliver a positive EBITDA*, which was up by approximately 201% compared to that of the previous year. Thanks to various marketing initiatives and the synergies created with our core businesses, Ponte 16 achieved a growth rate in gross gaming revenue that was well above the industry average. Occupancy rate at the award-winning Sofitel Macau At Ponte 16 also recorded outstanding improvement throughout the year, and the luxury VIP mansions of Sofitel Macau At Ponte 16 continued to be well received by high-end travellers.
Success Comes From Synergic Business Platforms
Riding on the steady recovery of the global economy and positive market sentiment, our travel business recorded a strong rebound in 2010. The significant improvement in performance was also driven by continuous progress of our meeting, incentive, convention and exhibition (MICE) business as well as our strategic expansion into the China market. Other high-margin services such as corporate ticketing and inbound tours to North America are also popular among our customers, thanks to our one-stop services and extensive sales network.
During the year, our travel business platform has continued to create synergies with Ponte 16 and our cruise business by bringing diversified clientele to them. At the same time, it also benefited from their well-connected business network.
Success Comes From Sustainable Growth
Macau's gaming industry set a record high in 2010 with industry revenue in Macau soaring approximately 58% to a record MOP188.34 billion. Tourism in Macau also blossomed, with the number of visitors rising approximately 15%. Capitalising on the momentum in Macau as well as the Government's efforts and determination in sustaining a healthy and sound development of the gaming industry, we believe Ponte 16 and our tourist-related business will continue to achieve consistent growth. The close collaboration between Guangdong, Hong Kong and Macau, following the announcement of "The Outline of the Plan for the Reform and Development of the Pearl River Delta", also brings new opportunities to the development of the Pearl River Delta region, from which the tourism sector in Macau stands to benefit. The Group's travel business is also expected to continue to benefit from the robust recovery of the global economy and growing affluence in China.
To further expand the Group's entertainment business and extend our footprint in Mainland China, the Group has started to develop a new business which intends to provide a technology services platform and technical support to the mobile sports lottery market in China. This initiative will also allow the Group to capture the enormous potential of China's growing lottery industry.
On the strength of our three-pronged business strategy, I am confident that we are in the best position to seize the ample opportunities ahead in order to deliver favourable returns and long-term value to our shareholders, while maintaining a high standard of corporate governance. We shall also continue to strengthen our business platform and work towards our goal to become one of the key players in the gaming, entertainment and tourist-related industries.
Appreciation
I would like to take this opportunity to thank our shareholders for their continued support, and to express my gratitude to my fellow directors for their guidance, our customers and business partners for their trust and our staff for their dedication and hard work. Our achievements in 2010 would not have been possible without the commitment and hard work of our people at all levels.
Yeung Hoi Sing, Sonny
Chairman
Hong Kong
29 March 2011
* EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortisation
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